What Is ‘Margin’ in the Context of Futures Contracts?
Margin in futures is a good-faith deposit required by the exchange to ensure that both parties can fulfill their contractual obligations. It is not a down payment.
There is an Initial Margin required to open a position and a Maintenance Margin that must be kept in the account. Futures contracts are marked-to-market daily, and gains or losses are added to or subtracted from the margin account.
