Differentiate between 'Initial Margin' and 'Maintenance Margin' ⎊ Path

Differentiate between ‘Initial Margin’ and ‘Maintenance Margin’.

Initial margin is the minimum amount of capital (collateral) a trader must deposit to open a new leveraged position. It acts as a security deposit.

Maintenance margin is the minimum amount of equity required to be held in the margin account to keep the position open. If the account equity drops below the maintenance margin due to losses, a margin call is triggered.

The initial margin is always greater than or equal to the maintenance margin.

What Is ‘Initial Margin’ and ‘Maintenance Margin’ in the Context of Perpetual Swaps?

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What Is Initial Margin and Maintenance Margin in Futures Trading?

Distinguish between Initial Margin and Maintenance Margin in Futures Trading

How Does ‘Initial Margin’ Differ from ‘Maintenance Margin’ in Derivatives?

How Does “Initial Margin” Differ from “Maintenance Margin” in Derivatives Trading?

Can a Trader Withdraw Initial Margin While a Position Is Open?

Why Is the Maintenance Margin Always Lower than the Initial Margin?

Glossar

Maintenance Margin

Collateral ⎊ Within cryptocurrency derivatives and options trading, the maintenance margin represents the minimum equity a trader must maintain in their account to cover potential losses.

Initial Margin

Collateral ⎊ Initial margin represents the equity a trader must deposit with a broker or exchange as a good faith commitment to cover potential losses arising from derivative positions, notably within cryptocurrency markets.