Maintenance margin — The minimum equity that must remain in an account to keep a futures position open.
How maintenance margin works in prop trading
Initial margin opens a position; maintenance margin keeps it. If equity falls below the maintenance level, a retail account receives a margin call and must add funds or reduce the position, and the broker may liquidate if neither happens. Maintenance is typically slightly below initial margin.
On a prop account the concept is largely academic, because the firm's drawdown rules trigger long before the exchange's maintenance level does. A $2,000 drawdown on a $50,000 account closes the account far above the point where any margin call would occur. Maintenance margin matters in prop trading mainly as background for understanding why exchange margin changes affect permitted size.
Key points
- The equity floor for keeping a position open, set slightly below initial margin.
- On prop accounts the firm's drawdown floor is reached long before the maintenance level.
- Exchanges raise maintenance requirements in volatile periods, reducing holdable size.
- Falling below it in a retail account triggers a call or forced liquidation.
Also known as
- maint margin
- variation margin threshold
Frequently asked questions
Do prop accounts get margin calls?
Effectively no. The firm's daily loss limit and maximum drawdown are far tighter than exchange margin, so the account is closed by the firm's own rules well before a margin call would occur.
What is the difference between initial and maintenance margin?
Initial margin is what you post to open the position; maintenance margin is the lower level your equity must stay above to keep it. Dropping below maintenance triggers a call rather than immediate closure in most retail accounts.
Maintenance margin is described here as a plain-language educational definition. Firms, platforms, and account programs may apply different conditions or calculations. Verify the current official terms before using this definition to make an account decision.