What Happens If a Trader’s Equity Falls below the Initial Margin but Remains above the Maintenance Margin?
If a trader's equity falls below the initial margin but stays above the maintenance margin, the position is still considered active and safe from immediate liquidation. However, the trader will typically be restricted from opening new positions or withdrawing funds until their equity is restored to the initial margin level.
This state is often referred to as being 'under-margined' but not yet at the 'liquidation threshold'.
