How Does the “Initial Margin” Differ from the Maintenance Margin?
Initial margin is the total amount of collateral required to open a new futures position. Maintenance margin is a lower threshold, the minimum amount of equity that must be maintained in the account after the position is established.
The initial margin is higher than the maintenance margin to provide a buffer for daily losses before a margin call is triggered.
Glossar
Margin Call
Trigger ⎊ A margin call in cryptocurrency, options, and derivatives markets represents a broker’s demand for additional funds to bring an account back to the minimum required margin.
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.