What Is the Difference between “Initial Margin” and “Maintenance Margin” in Futures Trading?
Initial margin is the amount of money a trader must deposit in their margin account to open a new futures position. It acts as a performance bond.
Maintenance margin is a lower threshold; it is the minimum balance that must be maintained in the account at all times. If the account balance drops below the maintenance margin due to losses, a margin call is issued, requiring the trader to deposit funds to bring the balance back up to the initial margin level.
