Mark to market (MTM) is a method of measuring the fair value of accounts that can fluctuate over time, such as assets and liabilities. Mark to market aims to provide a realistic appraisal of an institution's or company's current financial situation based on current market conditions. In trading and investing, certain securities, such as futures and mutual funds, are also marked to market to show the current market value of these investments. Mark to market can present a more accurate figure for the current value of a company's assets, based on what the company might receive in exchange for the asset under current market conditions. However, during unfavorable or volatile times, MTM may not accurately represent an asset's true value in an orderly market. Mark to market is contrasted with historical cost accounting, which maintains an asset's value at the original purchase cost. In futures trading, accounts in a futures contract are marked to market on a daily basis. Profit and loss are calculated between the long and short positions. Because the farmer has a short position in wheat futures, a fall in the value of the contract will result in an increase to his account. Likewise, an increase in value will result in a decrease to his account. For example, on Day 2, wheat futures increased by $4.55 - $4.50 = $0.05, resulting in a loss for the day of $0.05 x 50,000 bushels = $2,500. While this amount is subtracted from the farmer's account balance, the exact amount will be added to the account of the trader on the other end of the transaction holding a long position on wheat futures. The daily mark to market settlements will continue until the expiration date of the futures contract or until the farmer closes out his position by going long on a contract with the same maturity.