Margin is collateral used to support a trading position. In derivatives, it secures contractual obligations rather than paying for full ownership of the underlying asset. The eligible collateral and its recognized value depend on the product and account rules.
Opening and maintaining exposure
Initial margin is required to establish exposure; maintenance margin is the minimum support needed to keep it under the applicable risk framework. These amounts need not be identical. Losses, funding charges or a decline in collateral value can reduce the resources supporting a position.
Insufficient margin may lead to restrictions, a request for additional collateral or automatic liquidation. A warning period is not universal.
How margin differs from cost
Margin is not the same as a trading fee: available collateral may be released when exposure is reduced, after losses and obligations are accounted for. Nor is posted margin necessarily the maximum possible loss under every arrangement.
Isolated margin assigns collateral to a particular position, while cross margin shares eligible resources across a defined account scope. Portfolio margin may assess combined risk. Always distinguish wallet balance, account equity, available margin and the amount already reserved for positions or orders.