How Futures Margin Works: Initial vs Maintenance Margin, Daily Mark-to-Market, and Margin Calls

Futures margin is a good-faith deposit, called a performance bond, that you post with your broker to show you can cover losses on an open position. It is not a down payment and not a loan: you are not borrowing the rest of the contract’s value, you are posting collateral against a promise. Every trading day your account is marked to market, meaning gains are added and losses are taken out in cash, and if your balance falls below the maintenance margin, you get a margin call.

In short: to open a futures position you need at least the initial margin; to keep it open you need at least the maintenance margin. At CME Group, the initial requirement equals the maintenance level for most accounts and is set at 110% of maintenance for accounts the clearing firm classifies as higher risk. Each day the clearing house settles the price change in cash. If losses push your account below maintenance, CME’s rules say the call must restore it to the full initial level, not just back to maintenance. Margin is typically a small percentage of the contract’s value, so losses can exceed your deposit.

The misconception: “margin works like a stock margin loan”

In a stock margin account, you borrow money from the broker to buy shares and pay interest on the loan. Futures margin has nothing to borrow. When you buy a futures contract, nobody pays the full value of the underlying asset on either side; you have only agreed to a price for the future. The margin deposit exists to make sure that if the price moves against you, there is money to pay the other side. There is no margin interest. (Your idle cash may or may not earn interest, depending on the broker.)

The vocabulary

Notional value: the full value of what the contract represents, such as index level x $50 for the E-mini S&P 500. See notional value.
Initial margin: the amount required to open a position.
Maintenance margin: the minimum balance required to keep it open. CME’s term is maintenance performance bond.
Variation margin (settlement variation): the daily cash credit or debit from price changes. CME requires mark-to-market to be met in cash.
Margin call: a demand to add funds, usually back up to the initial level. See margin call.
Exchange vs house margin: the exchange sets minimums; brokers often require more, and can raise their requirement at any time.

Who sets the numbers

The clearing house sets minimum performance bond levels using risk models. CME says its models aim to cover 99% of one-day price moves for futures. It recalculates requirements at least daily and changes them by notice when volatility changes, sometimes on very short notice.

CME’s current rule distinguishes accounts by risk profile. Its published guidance says initial margin is set at 100% of maintenance for accounts without a heightened risk profile and at 110% of maintenance for accounts with one. The clearing firm decides which category an account falls into.

Margin levels change often. As of November 2026, the requirement for one E-mini S&P 500 contract was in the tens of thousands of dollars, a single-digit percentage of the contract’s notional value. Brokers may ask for more. Always check the exchange’s margin page and your broker’s requirement; the figures below are illustrative.

A worked example: four days in one E-mini S&P 500 contract

Contract terms (CME): $50 x the S&P 500 index, minimum tick 0.25 index points = $12.50.

Illustrative margin levels: maintenance $25,000, initial $27,500 (110% of maintenance).

You buy one contract at 6,000.00 and deposit exactly $27,500. Notional value: 6,000 x $50 = $300,000, so your deposit is about 9.2% of the exposure.

Day	Settlement price	Change (points)	Ticks	Daily P&L	Account after settlement	Status
Open	6,000.00				$27,500.00	Deposit
1	6,012.50	+12.50	+50	+$625.00	$28,125.00	Fine
2	5,980.00	minus 32.50	minus 130	minus $1,625.00	$26,500.00	Above $25,000, no call
3	5,945.25	minus 34.75	minus 139	minus $1,737.50	$24,762.50	Below $25,000: margin call
4	5,960.00	+14.75	+59	+$737.50	see below

The arithmetic each day is change in points x $50, or ticks x $12.50. For day 3: 34.75 / 0.25 = 139 ticks, and 139 x $12.50 = $1,737.50.

The margin call. After day 3 the account holds $24,762.50, below the $25,000 maintenance level. The call is to bring the account back to the initial level of $27,500:

Call amount: $27,500 minus $24,762.50 = $2,737.50.

That figure is also your total loss so far: the price is down 54.75 points from 6,000.00, and 54.75 x $50 = $2,737.50.

If you deposit the $2,737.50, the account is back at $27,500, and day 4’s gain of $737.50 takes it to $28,237.50. If you do not meet the call in time, the broker can close the position at the market price.

Put the numbers in perspective. The index fell 0.91% from your entry (54.75 / 6,000). Your account lost 9.95% of the original deposit ($2,737.50 / $27,500). That ratio, roughly eleven to one, is the leverage in this position.

The other side of the trade

Whoever sold the contract to you at 6,000.00 had exactly the opposite cash flows: debited $625 on day 1, credited $1,625 on day 2, credited $1,737.50 on day 3, and debited $737.50 on day 4. Futures are a zero-sum transfer between accounts before costs. The clearing house collects from one side and pays the other.

The same position in Micro E-mini terms

CME’s Micro E-mini S&P 500 (MES) is $5 x the index, one-tenth the size, with the same 0.25-point tick worth $1.25. Over the same four days, one MES contract would move by one-tenth as much: +$62.50, minus $162.50, minus $173.75, +$73.75. Smaller size means smaller dollar swings, but margin is also roughly one-tenth, so the leverage is similar. That point is easy to miss, and micro futures explained covers it in detail.

Excess margin and withdrawals

Gains work the same way in reverse. Any balance above the initial margin requirement is excess and can usually be withdrawn as cash, even though the position is still open. In the example, after day 1 the account held $28,125, so $625 was excess. That is a real difference from owning a stock, where a gain stays on paper until you sell: in futures, gains are paid to you in cash every day.

It also means you cannot “wait out” a loss the way a stock investor sometimes can. A stock that falls 10% and recovers costs a cash investor nothing in between. A futures position that does the same requires you to fund the loss in cash on the way down, and if you cannot, the position is closed at the low and never gets the recovery.

How big a move wipes out the deposit?

With an illustrative $27,500 initial deposit on one ES contract:

Move that triggers a call: the account can lose $2,500 before hitting $25,000. $2,500 / $50 = 50 points, about 0.83% at 6,000.
Move that wipes out the whole deposit: $27,500 / $50 = 550 points, about 9.2%.
A 5% fall (300 points) costs $15,000.

The S&P 500 has fallen far more than 9% in a short period several times, notably in March 2020. A loss beyond the deposit becomes a debt you owe the broker.

Canada

Futures on the Montréal Exchange clear through CDCC, which sets margin requirements for its clearing members. Canadian investment dealers then apply CIRO’s rules for client futures accounts, and may require more than the minimum. The mechanics are the same as in the US: initial deposit, daily settlement in Canadian dollars, and calls when the account falls short. The MX reference manual’s own example: buying 10 SXF contracts at 967.70 and settling at 968.70 produces variation margin of 10 x 1.00 x C$200 = C$2,000.

What can go wrong

Margin hikes in volatile markets. Clearing houses raise requirements when prices swing, which is exactly when many traders are already losing. A position that was adequately margined yesterday may need more cash today even without a loss.
Gaps. Futures trade nearly around the clock, but prices can still jump on news. Losses can blow straight through your maintenance level and past your entire deposit before anyone can act.
Forced liquidation. Brokers can close positions without waiting for you, at whatever the market offers. Many retail brokers liquidate intraday when the account falls below their own threshold.
Intraday margin calls. CME runs at least two clearing cycles a day and can run extra ones when markets move sharply, so calls are not limited to the end of the day.
Day-trading margins are not exchange margins. Some brokers allow much lower margin for positions closed the same day. That raises leverage further, and the full requirement applies if you hold past the cut-off.

A broader view of these risks is in futures risks explained honestly.

The short version

Futures margin is collateral for a promise, not a loan. You need the initial margin to open a position and the maintenance margin to keep it. Every day the clearing house settles gains and losses in cash; when your balance falls below maintenance, you must restore it to the initial level or be closed out. Because the deposit is a small fraction of the contract’s value, a small price move is a large percentage of your money, and a large move can cost more than you deposited.