Understand core FX, risk, and execution concepts used across Okoora’s infrastructure.

Mark-to-Market (MTM)

The process of revaluing a financial position, such as a currency hedge, based on current market prices. It reflects the unrealized gain or loss of a position if it were to be closed at today’s rates, providing a real-time view of its current value.

In currency hedging, MTM is used to assess the ongoing performance of forward contracts, options, or swaps relative to prevailing exchange rates. The difference between the contracted rate and the current forward or spot rate is used to calculate the present value of the hedge.

For example, if a company entered a forward contract to buy USD at 1.1000 and the current forward rate is 1.1200, the MTM would show a negative value, indicating an unrealized loss if the contract were settled early.

MTM is important for:

Accounting and financial reporting

Risk monitoring and collateral management

Daily margin calculations in cleared derivatives

It ensures transparency and helps both treasurers and risk managers evaluate the impact of market movements on hedging strategies over time.