Pay/Collect

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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.

INVESTOPEDIA EXPLAINS 'Pay/Collect'

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.

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