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What Is Margin?



In futures trading, margin is the deposit you make with your broker in order to open a new futures position, no matter if you are taking the long or short side of the trade.

This margin then becomes a running balance of your profit and loss where profits will be added onto and losses taken from it. Once your margin has dropped to a critical level due to losses, a margin call will be issued for you to top up your margin in order to stay in the position. Failing which your position will be forcefully liquidated.

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