I asked this question at traderji.com with no good answers, hence trying my luck here.
Dear Friends,
What i observed have created a fear for re-entering a future position of same stock even after square-off.
This is what i saw:
I purchased futures of ABC company at price suppose: 200/-
Price rose to 250/- and yet to square off, when it shows me MTM profit as 50/-
I square off and get a nice 50 bucks profit.
Case 1:
Now starts the drama !!!
The price fell to 100/- and starts rising from there.
I re-purchase the shares at 100/- but here it shows me, i have a MTM loss of around 150 Rs !!! As the shares value now starts increasing from 100/- my loss reduces.
I am utterly confused. I did squared off in the first transaction, then why does the system compare with the earlier price??
Case 2: I go long on a future trade when price was at 100/- price rose to 120/-, when it shows i have a MTM profit of 20Rs. I square off and get 20Rs profit. Now suppose the future price starts dropping from 120/- and i go short on the same future (in which i was long earlier), it shows me a MTM loss, as the price reduces. Now, suppose the price drops to 90/- My MTM profit becomes 30/- I square off and get a booked loss of Rs 10 in booked P/L!!! Why does it show, when i square-off the first position?
Pardon me, if i missing something, and again beg an apology in advance. But please help me to understand this !!
The problem also happens, if i go once short at a future, and later go long on it after sometime (of course the previous one was squared off).
Thank You once again.
EDIT:
Additionally the quantities purchased before and after are added as well. Also, my experience about this is only from intraday perspective.