Futures margin is collateral that supports open positions and determines liquidation thresholds. Understanding how initial, maintenance, and variation margin work helps reduce the risk of unexpected liquidations in volatile crypto markets. This guide explains the fundamentals of margin calculation, key contract specifications, and practical approaches to monitoring margin risk.
Futures margin fundamentals
Initial margin is a good-faith deposit that secures a futures contract. Unlike traditional margin trading, it is not a loan.
Maintenance margin is the minimum equity that must remain in an account to keep a position open. If equity falls below this level, the position may be liquidated.
Variation margin reflects the daily profit and loss adjustments credited or debited as prices change.
Exchanges set margin rates that can vary with volatility. Information for specific contracts is published by each venue. For example, Kraken lists rates and fee information in its fee schedule.
Key con
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