Credit Crisis

If you have been paying attention to CNBC or any other business channels that past couple of days you will see that the term Mark to Market is being thrown out there a lot lately. It is an insider term but it really does effect the everyday person and their investments that they might be trying to make in this topsy turvy market.

The term “Mark to Market” definition according to wikipedia is “an accounting methodology of assigning a value to a position held in a financial instrument based on the current market price for the instrument or similar instruments”. This basically means when I have a contract such as a futures contract, when I go to report this contract for accounting purposes I can mark the value of this contract the value that it is the day that I fill it out and not the value that it will be the day it expires.