What Is ‘Margin’ in the Context of Futures Trading?

Margin is the collateral deposited by a trader to cover the credit risk and potential losses on a leveraged futures position. It is not a down payment.

There are two main types: initial margin, required to open a position, and maintenance margin, the minimum equity level required to keep the position open. If the account equity falls below the maintenance margin, the trader receives a margin call to deposit more funds.