Margin is not risk
Initial and maintenance margin are performance bonds set by exchanges and brokers. Your risk is defined by position size and your stop.
Leverage risk. Futures losses can exceed your margin deposit. Contract specs, margins, sessions and funded-account rules here are illustrative; verify current specifications with the exchange, your broker or the provider.
How margin works
Initial margin is the deposit required to open a position; maintenance margin is the minimum to keep it. Futures accounts are marked to market daily (and brokers monitor intraday): gains and losses move cash in and out every day.
Some brokers offer reduced intraday margins. Lower margin does not reduce risk — it allows larger positions relative to your account, increasing risk.
Worked example
Margin vs price move (illustrative numbers)
- Illustrative MES initial margin: $1,500. Notional at 5,000: $25,000 → about 16.7× leverage on the margin.
- A 3% index move = 150 points × $5 = $750 — half the margin deposit.
- A 6% move = $1,500 — the entire margin. Larger moves exceed it.
Size from your stop and account risk budget, never from 'how many contracts my margin allows'.
Common misconceptions
“I can only lose my margin.”
Losses are unlimited by margin; you owe any deficit.
“If my broker allows it, the size is safe.”
Margin reflects the broker's risk tolerance, not yours.
Checkpoint