What Is the Difference between Initial Margin and Variation Margin for Futures?

Initial margin is the collateral required to open a futures position, serving as a good-faith deposit to cover potential losses from adverse price movements. Variation margin, or maintenance margin, is the amount required daily to bring the account back to the initial margin level after daily marking-to-market.

Variation margin is paid by the losing party to the winning party to reflect the day's profits and losses.