What Is the Key Difference between Variation Margin and Maintenance Margin?
Maintenance margin is the minimum equity level that must be sustained in a margin account after a position is established. Variation margin, on the other hand, refers to the daily cash flow that occurs as a result of the daily marking-to-market process.
It is the amount added to or subtracted from the account to reflect the daily gains or losses. If the account drops below the maintenance margin, a margin call is issued.
