Margin Requirements

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What are futures margins?

Exchange Margin Requirements

 

 

Futures Margins

 

All futures market participants-buyers and sellers-must deposit money with their brokers in futures margin accounts to guarantee contract obligations. 

 

While the exchanges sets minimum margin levels, brokerage firms may require larger margins than the Exchange minimum. When you first place an order, the amount you must deposit in your account is called the initial margin. Subsequently, gains or losses are added or subtracted daily from your margin account based on the close of that day's trading session. This system is called marking to market

 

After you have posted your initial margin and have started trading, you must maintain a minimum margin balance or maintenance margin. If your balance falls beneath the maintenance level, you will receive a margin call that requires you to add additional money to your account. If a person is unable to fulfill a margin call, the account will be closed, the margin money collected, and the clearing corporation will guarantee the other side's position in the market. 

 

The daily collection of margin funds ensures that sufficient funds are in place to cover all losses. This also ensures that all profitable positions receive their gains. So while futures offer you the opportunity to enter into highly leveraged transactions, the margin system prevents losses as a result of a counterparty's nonperformance.

 

Exchange Margin Requirements

 

Listed below are links to the margin requirements of the major commodity exchanges in the world: