Margin

Margin is collateral used to open and maintain a position when trading with borrowed capital or derivatives.

Margin does not necessarily equal the full value of a position. When leverage is used, the trader provides only part of the position value as collateral while the remaining exposure is supported by the platform’s financing mechanism.

Types of margin

• initial margin — the minimum collateral required to open a position;
• maintenance margin — the minimum collateral required to keep an existing position open.

If the collateral falls below the required threshold, the exchange may initiate liquidation.

Platforms can also offer different margin modes, such as isolated and cross margin. Under isolated margin, the risk is generally limited to the collateral assigned to a specific position, while cross margin can use available account balance to support multiple positions.