Futures margin calculator: capital to carry a position
Initial and maintenance margin across a number of contracts.
Margin calculator
Margin calculator
Capital to carry a futures position.
Maintenance: $10,000 · a margin call triggers below it
How much capital does it take to carry this many contracts?
Margin is not a payment or a deposit against the value of the contract. It is a performance bond: money held to cover adverse moves while a position is open. It is returned when the position is closed.
Two levels matter. Initial margin is what is required to open the position. Maintenance margin is the lower level the account has to stay above; fall below it and the account is called back up to the initial level, not to the maintenance level.
Worked example
- Contracts
- 5
- Initial margin
- $2,200 per contract
- Maintenance
- $2,000 per contract
- Initial: 5 × $2,200 = $11,000
- Maintenance: 5 × $2,000 = $10,000
Opening the position needs $11,000. If losses take the account below $10,000, a call brings it back to $11,000, which means finding $1,000 or more on short notice.
How it works
The exchange sets margin per contract and changes it as volatility changes, sometimes with little notice. A position sized against today requirement can need more capital tomorrow without the position itself changing.
The gap between initial and maintenance is the room a position has to move against the account before a call. In the worked example that is $200 a contract, which on 5,000 bushel grain contracts is 4 cents a bushel. A position can be perfectly sound as a hedge and still generate calls on a 4 cent move.
For a hedger this is the point worth planning for. A short futures hedge loses money on the board precisely when the crop in the field is gaining value, and the board settles daily in cash while the crop does not. Carrying capacity for margin calls is part of the hedge, not separate from it.
initial = contracts × initial margin per contract; maintenance = contracts × maintenance per contractCapital required, and the move that triggers a call
At $2,200 initial and $2,000 maintenance on 5,000 bushel contracts, a 4 cent adverse move exhausts the cushion.
| Contracts | Bushels | Initial | Maintenance | Cushion |
|---|---|---|---|---|
| 1 | 5,000 | $2,200 | $2,000 | $200 |
| 3 | 15,000 | $6,600 | $6,000 | $600 |
| 5 | 25,000 | $11,000 | $10,000 | $1,000 |
| 10 | 50,000 | $22,000 | $20,000 | $2,000 |
| 20 | 100,000 | $44,000 | $40,000 | $4,000 |
Common questions
Is margin the cost of the position?
No. It is collateral, held while the position is open and returned when it is closed. The cost of the position is whatever it gains or loses, plus commissions and fees.
What happens on a margin call?
The account has to be brought back to the initial margin level, not just back above maintenance. Failing to meet it can result in the position being liquidated, which converts a paper loss into a realised one at a time not of your choosing.
Where do current margin rates come from?
The exchange publishes them and revises them with volatility. Brokers may also require more than the exchange minimum. Both are inputs here so a scenario can be run against whatever the current requirement is.
Do hedgers pay less margin than speculators?
Often yes. Exchanges commonly set a lower requirement for a bona fide hedge account than for a speculative one. The classification is handled by the broker when the account is opened.
Related
This tool is designed to help plan your overall portfolio and is not trading advice. You should carefully consider your portfolio, risk tolerance, and other metrics; Consult with your broker prior to making trading decisions