Gains and losses on futures contracts are realized:

A) Only on the settlement day.
B) If the contract is exercised, otherwise, they are never realized.
C) Only if the buyer finds it profitability to exercise the contract.
D) On a daily basis through a process known as marking-to-market.
E) Only at the time the contracts mature.

Futures Contracts

Standardized legal agreements to buy or sell a particular commodity or financial asset at a predetermined price at a specified time in the future.

Marking-to-market

The practice of updating the value of an asset to its current market level rather than its book value for accounting purposes.

Settlement Day

The specific day on which the transfer of securities or commodities between buyer and seller is completed.