How is profit/loss calculated in derivative trading?

The profit/loss calculation follows a daily settlement mechanism. Specifically, investors (traders) engaged in trading and holding positions in derivative securities contracts are required to settle the entire profit or loss arising from those positions each day

• If in a net loss position: Investors must settle the full loss amount before 8 AM on the following trading day.
• If in a net profit position: The brokerage firm (TCBS) will settle the full profit amount no later than the next trading day.

The profit or loss for each position is calculated based on the closing trading price of the respective futures contract. For futures contracts tied to an index that reaches its expiration date, the profit or loss is calculated based on the closing index price on the contract’s expiration date.