1. What is Futures Margin?

Futures margin is the amount of capital required to open and maintain a futures position. It represents a percentage of the total contract value and serves as a performance bond to ensure both parties fulfill their obligations.

2. How Does the Calculator Work?

The calculator uses the futures margin formula:

Where:

• \( \text{Contract Size} \) — Number of units in the contract
• \( \text{Price} \) — Current price per unit in currency
• \( \text{Margin %} \) — Exchange-required margin percentage (as decimal)

Explanation: The margin represents the minimum deposit required to control the full contract value.

3. Importance of Margin Calculation

Details: Proper margin calculation is essential for risk management, determining position sizing, and meeting exchange requirements to avoid margin calls.

4. Using the Calculator

Tips: Enter contract size in units, price in currency per unit, and margin percentage as a decimal (e.g., 5% = 5). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between initial and maintenance margin?
A: Initial margin is required to open a position, while maintenance margin is the minimum balance required to keep it open.

Q2: How often do margin requirements change?
A: Exchanges may adjust requirements based on market volatility, typically increasing them during periods of high volatility.

Q3: Are margin requirements the same for all futures contracts?
A: No, they vary by contract, with more volatile products generally requiring higher margins.

Q4: Can brokers require higher margins than exchanges?
A: Yes, brokers often set higher "house margin" requirements as an additional buffer.

Q5: How does leverage relate to margin?
A: Margin determines leverage - lower margin percentages mean higher leverage and greater risk.