What is Mark-to-Market (MTM)?

Mark-to-market (MTM) is an accounting method that records the value of an asset according to its current market price.

How Does Mark-to-Market (MTM) Work?

For example, the stocks you hold in your brokerage account are marked-to-market every day. At the closing bell, the price assigned to each of your stocks is the price that the larger market of buyers and sellers decided it would be at the end of the day. No other pricing information is included.

MTM is similarly used to price futures contracts, which is very important for investors who trade commodities with margin accounts.

Why Does Mark-to-Market (MTM) Matter?

Most agree that MTM pricing accurately reflects the true value of an asset. However, MTM can be problematic in times of uncertainty because the value of assets can vary wildly from second to second -- not because of changes in the underlying value of assets, but because buyers and sellers are surging in and out in unpredictable ways. It is important not to confuse mark-to-market with mark-to-management or mark-to-model.

Ask an Expert about Mark-to-Market (MTM)

All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Mark-to-Market (MTM).

Be the first to ask a question

If you have a question about Mark-to-Market (MTM), then please ask Paul.

Ask a question
Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

Verified Content You Can Trust
verified   Certified Expertsverified   5,000+ Research Pagesverified   5+ Million Users