Maintenance margin is the minimum level of equity you must keep in a margin account to continue holding an open position. If your account equity falls below this threshold, your broker or the exchange will demand more funds or start reducing your position.
Think of it as the keep-alive requirement for leveraged trading. You post initial margin to open a trade, then you must maintain at least the maintenance amount while the trade is running. Drop under it and you face a margin call.
Initial margin vs maintenance margin
Initial margin is the amount you must post to open a position. Maintenance margin is lower and applies after the trade is live. The gap between them is there to reduce the number of small top-ups you would otherwise need as prices wiggle around.
The mechanics differ by product:
- Futures and perpetuals: the exchange or clearing house sets initial and maintenance levels for each contract. If your balance drops below maintenance, you are asked to top up back to the initial margin level.
- Cash equities and CFDs on shares or indices: the maintenance requirement is often a percentage of the market value of your position. If equity falls below that percentage, you must deposit cash or reduce the position to restore it.
- Options selling (for uncovered positions): maintenance margin can be dynamic, changing with price, volatility and time to expiry because potential losses change.
Exact thresholds and processes vary by broker, venue and jurisdiction, and they can change in volatile markets.
Where you will encounter maintenance margin
You see maintenance margin anywhere you use leverage, because leverage means you control exposure larger than your cash. Common places are:
- An equity margin account used to buy or short shares.
- An exchange-traded futures contract on an index, commodity or rate.
- CFDs and spread bets offered by brokers, which wrap margining into a retail product.
- Crypto perpetual swaps, which borrow futures-style margining.
Short positions often carry higher maintenance requirements than longs, reflecting borrow and squeeze risk. Concentrated or illiquid holdings can also attract higher house margins than the headline schedule.
How a margin call is triggered
In simple terms, a margin call arrives when equity falls below maintenance margin.
- Equity margin account: Equity equals market value of your position minus the loan. Maintenance is a percentage of market value. When market value drops far enough that your equity percentage is below the requirement, the call is triggered.
- Futures or perpetuals: Your margin balance is marked to market each day or continuously. Losses reduce the balance, gains add to it. If the balance falls below the contract’s maintenance level, you must pay variation margin to bring it back up, often to the initial margin level.
During stressed markets, price gaps can push an account below maintenance in one move. Some platforms implement auto-liquidation bands to cut exposure quickly without waiting for manual action.
What happens if you do not meet it
The process is usually staged, but timing and thresholds vary by provider:
- Notification: You receive a margin call, often with a deadline that can be very short in fast markets.
- Top-up or reduce: You can wire funds, transfer collateral, or close part of the position to restore equity above maintenance. In futures, the top-up commonly brings the balance back to the initial margin level.
- Forced reduction: If you do not cure the shortfall in time, the broker or exchange will start liquidating positions, typically beginning with the most leveraged or riskiest.
Forced liquidation can occur at prices you would not choose, especially in thin or gapping markets. That is why many traders keep a buffer above maintenance rather than running their account right on the line.
Worked examples
Example 1, equities on margin. You buy 100 shares at £100 for a £10,000 position. You post £5,000 cash and borrow £5,000. Suppose the maintenance requirement is 25 percent of market value. A margin call occurs when equity equals 25 percent of market value:
Market value − loan = 25 percent of market value, so 0.75 × market value = £5,000. The trigger market value is about £6,666.67, which is a share price of roughly £66.67. If the price falls to that level, you must add cash or sell shares. If you add £1,000, your equity rises and the position can be kept, assuming prices do not keep falling.
Example 2, index futures. A contract has a £10 per point multiplier. You buy one contract at 4,000 points, initial margin is £4,000 and maintenance is £3,200. If the market drops 200 points to 3,800, your loss is 200 × £10 = £2,000. Your margin balance falls to £2,000, which is below maintenance. You receive a call to pay £2,000 to restore the balance to the initial £4,000. If you fail to pay promptly, the position can be closed by the broker.
Numbers differ across markets, but the trigger logic is the same in both cases, equity must not sit below the maintenance threshold.
Managing exposure and avoiding forced liquidation
Maintenance margin is a constraint you can plan around. Practical habits include:
- Run a buffer: Hold more equity than the bare minimum so routine volatility does not trip a call.
- Size positions thoughtfully: Match position size to account equity and volatility. Contract multipliers and lot size can make a small-looking move large in cash terms.
- Use risk controls: Stop orders, hedges or reduced exposure during event risk can keep drawdowns manageable. Order behaviour varies by venue and instrument.
- Watch margin schedules: Exchanges and brokers can raise maintenance requirements in turbulent periods, which increases the equity you need overnight without any price move.
- Know your mode: Cross margin uses overall account equity to support positions, isolated margin ring-fences collateral per trade. Each has trade-offs.
Related terms and common mix ups
Variation margin is the daily or intraday cashflow that settles profits and losses on futures-style products. It moves your margin balance up or down, which is what can push you under maintenance. It is a process, not a threshold.
House margin vs exchange or regulatory minimum: Brokers often apply their own, stricter maintenance percentages than the minimum. They might also set higher requirements for small-cap shares, concentrated portfolios, or during volatile periods.
Haircuts apply when you post securities as collateral. A haircut reduces the collateral’s recognised value. It is different from maintenance margin, though both affect how much room you have to trade.
Short vs long requirements: Maintenance on short equity positions can be higher than on longs due to borrow costs and the risk of rapid squeezes.
Across all formats, the principle is the same, maintenance margin is the line below which your leveraged position cannot be kept without action. Understand where that line sits and how quickly it can move, and you will be far less likely to meet it the hard way.