Initial margin is the collateral required to establish or increase a margined trading position. It determines whether sufficient resources are available to take on the proposed exposure, rather than describing the position’s current profit or loss.
A simplified calculation
Suppose a linear contract requires initial margin equal to notional value divided by selected leverage. For 2,000 USDT of exposure at 5× leverage, the basic requirement is 400 USDT. This hypothetical calculation excludes fee reserves, collateral discounts and risk-tier adjustments.
Actual requirements may depend on the mark price, position size, product and account mode. A displayed requirement can therefore change after opening. Lower permitted leverage generally means more initial margin for the same notional exposure.
What it does not guarantee
Initial margin differs from maintenance margin, which governs the minimum support needed to continue holding exposure. Posting the opening requirement does not ensure a position can survive later losses.
Open orders may reserve margin before execution, reducing the amount available for other trades. Adding collateral can improve support for an existing position, but it also places more capital at risk; it does not reverse an unfavorable market move.