Trading term

What is Maintenance margin?

Maintenance margin is the minimum equity a leveraged account must keep to hold a position open — lower than the initial margin needed to open it. If losses erode equity below the maintenance level, a margin call is triggered. It's the safety buffer the exchange requires against a position moving too far offside.

There are two margin levels. Initial margin is what you must deposit to open a position; maintenance margin is the smaller amount your account must never fall below while the position is open. The gap between them is your cushion: you can absorb some losses (your equity dropping from the initial level toward maintenance) before anything happens. Once daily mark-to-market losses push your equity below the maintenance margin, the broker issues a margin call to restore it.

Maintenance margin exists to give the exchange a warning zone before a position becomes dangerous. Setting it below initial margin means traders aren't called the instant they take a small loss, but they are called before losses grow large enough to threaten the account or the clearinghouse. The size of the buffer (initial minus maintenance) determines how much room a position has to move against you before a call — which is why knowing both numbers, not just the initial deposit, is essential for managing leveraged risk.

Initial vs maintenance margin
loss buffer ($1,000)Initial $4,000to openMaintenance $3,000stay above thisbelow → margin callTwo margin levels — and the buffer between them

Initial margin opens the position; the lower maintenance margin is the floor you must stay above. The gap between them is your loss buffer — fall below maintenance and a margin call is triggered.

For example

A contract needs $4,000 initial and $3,000 maintenance margin. You open with $4,000. You can lose up to $1,000 (equity falling to $3,000) before trouble — but the moment a loss takes equity below $3,000, a margin call fires to restore the account toward the initial $4,000.

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Why it matters to you

Maintenance margin defines exactly how much a leveraged position can move against you before you're forced to act — it's the real risk threshold, more important than the initial deposit. Traders who track it (and keep well above it) control when they might be called; those who ignore it get blindsided.

⚠ The buffer is smaller than it looks

Traders anchor on the initial margin they posted and forget how little room lies between it and the maintenance level. That gap can be a small percentage of the position's value, so a modest adverse move eats through it fast. Treating the initial deposit as your full loss tolerance ignores how quickly you reach the maintenance threshold.

Frequently asked questions

What is maintenance margin?

Maintenance margin is the minimum equity your account must maintain to keep a leveraged position open. It's set below the initial margin required to open the position. If losses push your equity below the maintenance level, you get a margin call to top it back up.

What's the difference between initial and maintenance margin?

Initial margin is the deposit needed to open a position; maintenance margin is the lower minimum you must stay above to keep it open. The gap between them is the loss buffer you can absorb before a margin call is triggered.

What happens when you fall below maintenance margin?

A margin call is issued: you must deposit funds to bring the account back toward the initial margin, or reduce the position. If you don't meet the call, the broker liquidates positions to cover the shortfall — often at an unfavourable price.

Who sets the maintenance margin?

The exchange sets minimum maintenance-margin requirements based on the contract and its volatility, and brokers can require more. More volatile contracts carry higher margins. The levels can change, sometimes rising during turbulent markets, which can itself trigger calls.

Related terms

BackwardationBackwardation is when futures prices are lower for later delivery dates — the futures curve slopes downward. It often signals tight near-term supply or strong demand for immediate delivery. For futures holders it creates a positive 'roll yield,' as they sell pricier near-term contracts and buy cheaper later ones.BasisBasis is the difference between an asset's futures price and its current spot (cash) price. It reflects carrying costs, supply and demand, and time to expiry — and it converges to zero as the contract nears expiration, since a future about to settle must match the spot price. Traders watch basis to gauge conditions and to hedge.CFD (contract for difference)A CFD (contract for difference) is a derivative where you and a broker agree to exchange the difference in an asset's price between opening and closing the trade. You never own the underlying — you simply profit or lose on the price move, with leverage. CFDs cover stocks, indexes, commodities and crypto, and are popular outside the US, where they're banned.ContangoContango is when futures prices are higher for later delivery dates — the futures curve slopes upward. It usually reflects the costs of storing and financing an asset until delivery. Contango creates a 'roll cost' for anyone holding futures over time, as they repeatedly sell cheaper near-term contracts and buy pricier later ones.
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