Maintenance margin

Maintenance margin is the minimum amount of equity a trader must keep in a margin or futures account once a position is open. It is separate from the initial margin required to open the position in the first place, which is typically higher. Once the position is on, the broker or exchange only requires the account to stay above this lower maintenance level.

The requirement exists because margin trading and futures both involve borrowed exposure, where losses can move faster than the cash actually sitting in the account. Brokers set maintenance margin as a buffer so they can step in before losses on a leveraged position exceed what the trader has posted. FINRA sets an industry minimum for margin accounts, but individual brokers commonly require more, especially on volatile stocks or concentrated positions.

When an account's equity drops below the maintenance margin level, whether because the stock fell, the futures contract moved against the trader, or both, the broker issues a margin call demanding more funds or securities. If the trader cannot meet the call, the broker has the right to sell off positions in the account without further notice to bring equity back above the required level. Traders using margin need to watch this threshold closely, because a sharp move against a leveraged position can trigger a call and a forced liquidation within the same trading day.