GNCC Capital Inc (GNCP)

[moe_the_gyp01]

Eli, does it make sense to you that you could have an "unrecognized loss" in a regulated futures trading account? My experience and the rules are that all futures are settled mark to market cash settled daily. No carryover or unsettled positions therefore no unrealized or unrecognized anything.

Once a futures contract’s final daily settlement price is established the back-office functions of trade reporting, daily profit/loss, and, if required, margin adjustment is made. In the futures markets, losers pay winners every day. This means no account losses are carried forward but must be cleared up every day. The dollar difference from the previous day’s settlement price to today’s settlement price determines the profit or loss.

Mark-to-market enforces the daily discipline of exchanges profit and loss between open futures positions eliminating any loss or profit carry forwards that might endanger the clearinghouse. Having one final daily settlement for all means every open position is treated equally. By publishing these daily settlement values the exchange provides a great service to commercial and speculative users of the futures markets and the underlying markets they derive their price from.