Define ‘Maintenance Margin’ and Its Role in Leveraged Derivatives Trading.
Maintenance Margin is the minimum amount of equity (collateral) a trader must maintain in their margin account to keep a leveraged derivatives position open. If the account's equity falls below this level due to losses, the trader will receive a 'Margin Call.' This forces them to either deposit more funds to bring the equity back up to the initial margin level or face automatic liquidation of their position by the exchange.
