DEFINITION of 'Pay/Collect'

An abbreviated reference to the payment or collection of funds (after futures positions have been marked to market) between clearing members and their respective clearing houses.


Typically, futures positions are marked to market every evening after exchanges are closed for trading. As futures trading is a zero-sum game, in marking to market, one side of the futures position will be in a deficit position while the other in a surplus. This imbalance is offset through the pay/collect transactions executed by the brokers to their clearing organizations.

  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s ...
  2. Clearing House

    An agency or separate corporation of a futures exchange responsible ...
  3. Clearing

    The procedure by which an organization acts as an intermediary ...
  4. Mark To Market - MTM

    1. A measure of the fair value of accounts that can change over ...
  5. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  6. Implied Volatility - IV

    The estimated volatility of a security's price.
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