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I've tried looking for an answer to my question and have not been able to fine one.
A scenario:
On Sunday at market open (6PM EST) I take a trade, buy to open 1 ES contract at 3000. On Monday the session closes at 3050. Monday evening session opens at 3050 and I am still holding the contract and now its Tuesday and the session closes at 3040.
Given the above, what is my total profit/loss for Monday and Tuesday?
Even though I didn't sell the contract myself, what is considered my "opening" price for the Tuesday session? Is it 3000 since I never sold my contract or is it 3050 which reflects the day's opening price irregardless of the price i paid in a prior trading session?
All i've found is information discussing mark to market, and daily settlement without specific scenarios such as the above.
Can you help answer these questions from other members on NexusFi?
I'm not sure what's unique about the above scenario, as it's covered by standard MTM practices. Forget the "open" .. that doesn't matter. Only the settlement matters. If you buy to open at 3000 and ES settles at 3050 even, your profit is 50 handles, or $2500. That's your daily profit. If the next day it settles at 3040 and you are still long, your loss is 10 handles, or $500.
One reason is that you expect your position to continue to profit, and you want to take advantage of that. Look at the "open interest" of a contract. That is how many outstanding positions are being held. It's a lot. People trade long term either outright with futures or use them for hedging. More practically, funds and large institutions simply cannot exit positions at the end of the day -- they are too large.
