The unrealised profit or loss on open futures positions, which in futures is credited or debited in cash every night rather than sitting as a paper number.
Because futures are marked to market daily, the distinction between realised and unrealised is much softer than in stocks. Today's open profit is actual cash swept into your account overnight, and it is usable as margin for new positions.
That has two consequences. Unrealised gains fund further leverage, which is how positions grow quietly. And unrealised losses are real cash leaving the account, which is why a losing futures position can trigger a call long before the trade is closed.
Example: long 2 gold contracts from $2,380, market at $2,404. OTE = 24 x 100 oz x 2 = $4,800 credited that night. Account equity rises by $4,800 and, at $12,000 margin per contract, that is enough excess to add a third contract without depositing anything.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Margin and leverage. A $5,000 deposit can control a $100,000 position, which is 20:1 leverage. Because the loss is measured on the full $100,000, a 2.5% move against you halves the deposit and brings a margin call, and a 5% move uses all of it.Buying a call: payoff at expiry. A 105-strike call bought for 3 loses that whole 3 if the price finishes at or below 105, breaks even at 108, then gains a dollar for every dollar higher. The loss is capped at the premium; the upside is not capped.
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