Module 1F: Futures Foundations · Lesson 4 of 13 · Back to Futures Foundations · Course
What you’ll learn
- what futures margin is (and isn’t)
- initial vs maintenance margin
- how daily mark-to-market works
- what a margin call is
- why a real futures account can lose more than you deposit
Margin is a deposit, not a down payment
When you buy a share, you pay for it in full. With futures you don’t. Instead, you put up margin – a good-faith deposit that shows you can cover daily losses (CME Group, Margin: know what’s needed, checked 18 October 2026). CME calls it a “performance bond”.
Margin is a small fraction of the contract’s full value. That’s what makes futures leveraged: a 1% move in the market can be a much bigger percentage of the money in your account.
Initial and maintenance margin
- Initial margin – the amount you need in your account to open a position.
- Maintenance margin – the minimum you must keep while the position is open. It’s lower than initial margin.
The exchange sets minimum margin levels for each contract and changes them when markets get more or less volatile. Your broker can ask for more than the exchange minimum, and often does in fast markets.
Day-trading margin
Many brokers offer a lower day-trading (intraday) margin for positions you close before the end of the session. It lets you open bigger positions with less money – which means more leverage, not less risk. If you hold past the cut-off time, the full exchange margin applies, and the broker may close your position if you don’t have it.
Mark-to-market: profits and losses every day
Futures accounts are settled daily. At the end of each session, the exchange sets a settlement price and every open position is marked to market: gains are added to your account and losses taken out in cash. Losses can’t quietly build up until you close.
Margin calls
If losses take your account below the maintenance margin, you get a margin call. You’ll need to add money to get back to the initial margin level, or reduce your position. In practice, many retail brokers don’t wait – their systems can close your positions automatically, at whatever price is available, without warning.
Worked example (hypothetical)
All figures are made up for illustration – real margins vary by contract, broker and date.
You have $3,000 in your account. You buy 1 MES at 6,000. Suppose the initial margin is $2,000 and maintenance is $1,800.
- The market falls 150 points. Loss = 150 × $5 = $750. Account = $2,250. Still above maintenance.
- It falls another 100 points. Total loss = $1,250. Account = $1,750 – below maintenance. Margin call: add money or the broker closes the position.
Losing more than you deposit
With UK spread bets and CFDs, FCA-authorised providers must give retail clients negative balance protection, so you can’t lose more than the money in your account. That protection doesn’t apply to futures. If the market gaps sharply – over a weekend, on major news, or when a market hits a price limit – your position can be closed at a price far beyond your stop, and your account can go negative. You’d owe the broker the difference.
That’s why this course asks you to size every futures trade by your stop, not by the margin available. See 1F.8 Futures position sizing in ticks and client money and negative balance protection.
What about prop accounts?
In most futures prop challenges you trade a simulated account, so there’s no real margin call and you can’t owe the firm money. Instead, the firm’s drawdown rules close the account. Your loss is the fee. See 1F.10.
Key takeaways
- Margin is a deposit, a small fraction of the contract’s value – that’s leverage.
- Initial margin opens a trade; maintenance margin is the minimum to keep it open.
- Accounts are marked to market daily.
- A margin call can mean your positions are closed automatically.
- Futures have no negative balance protection: a real account can go negative.
Quick check
- What’s the difference between initial and maintenance margin?
- Does a lower day-trading margin reduce your risk?
- Can a UK retail client lose more than their deposit on futures?
Answers: 1) Initial is needed to open a position; maintenance is the minimum to keep it open. 2) No – it increases the leverage available. 3) Yes, with a real futures account; negative balance protection only covers spread bets and CFDs.
FAQs
Where can I see current margin levels?
CME Group publishes exchange margins on its website, and your broker shows its own requirements on its platform. Brokers often require more than the exchange minimum.
Should I use all my available margin?
No. Margin tells you the most you can open, not what you should. Size from your stop and planned risk instead.
Disclaimer: This page is general education, not financial, investment or tax advice or a personal recommendation, and it doesn’t take your circumstances into account. Examples are hypothetical, for illustration only, and not an invitation to buy or sell. Learning to trade doesn’t guarantee profits. Past performance is not a reliable guide to future results. Futures, spread bets and CFDs are complex and carry a high risk of losing money quickly because of leverage, and most retail traders lose money. With a real futures account, losses can exceed your deposit. Prop firm challenges are paid evaluations: the fee is usually lost, and funded accounts are usually simulated. Prop firm rules vary between firms and change often, so check each firm’s current rules. Only trade with money you can afford to lose, and speak to an independent FCA-authorised adviser if you’re unsure. Contract specifications, market hours and margin concepts were checked against CME Group on 18 October 2026 and can change. Read our full risk warning.