When a futures exchange marks to the market, does it "help" the losing side or winning side. According to my knowledge, it makes the losing side lose even more by deducting from their margin account? If that is the case, doesn't it increase the default risk?
closed as off-topic by Helin, Bob Jansen♦ Jun 19 '18 at 5:59
This question appears to be off-topic. The users who voted to close gave this specific reason:
- "Basic financial questions are off-topic as they are assumed to be common knowledge for those studying or working in the field of quantitative finance." – Helin, Bob Jansen
You need to read some basic books about futures. If you buy a futures contract and it goes down , the exchange demands variation margin. That IS the loss. There is no doubling up. I don't understand the question about default risk. Default of whom ?