Can a Futures Trader Lose More than Their Initial Margin?

Yes, a futures trader can lose more than their initial margin. While the margin system is designed to prevent this through daily MTM and margin calls, a rapid, severe price movement (a "gap risk") can cause the account equity to fall below zero before the clearinghouse or broker can liquidate the position.

This is particularly a risk during times of extreme market volatility or when markets are closed.