Margin Requirements

Initial margin is the deposit required to maintain either a short or long position in a futures contract, it is NOT a cost. The maintenance margin is the amount of initial margin that must be maintained for that position before a margin call is generated. The maintenance margin level is NOT additional to the initial margin.

For example if the initial margin for a mini silver contract is $1,000 and the maintenance margin level is $750, $1,000 would need to be allocated as initial margin. If the silver position lost let's say $300 one day, the value of the $1,000 initial margin would now only be $700, which is below the $750 maintenance requirement. Therefore, $300 from the trading account would be automatically allocated towards bringing the initial margin figure back to $1,000. If there were not excess funds in the account to automatically bring the initial margin amount back up to $1,000, a margin call would be generated. Margin calls need to be either immediately met with additional funds or the position will be liquidated.