Deposit Margin
The upfront collateral exchanges demand before your order works: skin in the game.
Deposit margin is the collateral posted to open a leveraged position. It is the venue protection against your losses, adjustable upward at any time.
Deposit margin, usually just called margin on derivatives venues, is the collateral you must post before opening a leveraged position. Exchanges set minimums per contract; brokers often demand more. Fall below maintenance levels and the venue liquidates you without asking.
How It Works
- Posted in cash before positions open
- Set per contract by the exchange minimum
- Brokers can require above the minimum
Trading Tips
Keep multiples of minimum margin free at all times
Expect hikes before events and expiries
Liquidation starts at the venue math, not your opinion
Deposit Margin Example
Say crude futures require $6,000 deposit margin per contract while your broker asks $8,000. You post the broker figure; a $2,000 adverse move triggers their call although the exchange minimum still holds. House rules beat venue rules.
How Traders Use Deposit Margin
Fund multiples above minimums so normal noise never approaches a call. Read margin schedules before events, because hikes land exactly when volatility peaks.
Related Terms
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