Futures margin and leverage: initial, maintenance and margin calls

In stock trading, "margin" means borrowing from your broker to buy more shares. In futures, the same word means something different: a good-faith deposit, sometimes called a performance bond, that you post so the clearinghouse knows you can cover a day's losses. Nobody lends you anything. The deposit is small next to the value of the contract, and that gap is where the leverage of futures comes from.

Leverage is the whole story of futures risk. A deposit of a few thousand dollars can control a hundred thousand dollars of crude oil, so an ordinary 2% or 3% price move can wipe out a large share of the money in the account in a single session. This guide walks through initial and maintenance margin, the daily variation-margin cash flows, what a margin call is and how it is met, and how to measure the leverage you are really taking, using one WTI crude contract as the running example. If you are new to contract sizes and the clearinghouse, read Futures contracts explained: specs, clearing, expiry and settlement first.

Margin as a performance bond

When you open a futures position, two levels matter.

• Initial margin is the amount you must have in the account to open one contract. The exchange's clearinghouse sets a minimum for each contract, and your broker (a futures commission merchant, or FCM) can require more.
• Maintenance margin is a lower threshold. As long as your account equity stays at or above it, you can keep the position without adding money.

Both are quoted in dollars per contract, and both change. Clearinghouses raise them when markets get more volatile and lower them when things calm down, sometimes on a day's notice. For that reason this article does not quote a current CME margin for crude oil; the $6,000 used below is illustrative, chosen to make the arithmetic easy to follow. Check the clearinghouse's and your broker's current figures before trading.

The deposit is not a down payment on the oil. If you hold the contract until it is closed, you never pay its full value; you only pay or receive the change in price. That is the second difference from a stock margin loan, where you own the shares and owe the broker the balance (see Buying on margin: how margin loans, interest and leverage work).

Variation margin: settling up every day

Every evening the exchange publishes a settlement price for each contract, and the clearinghouse moves cash from losers to winners. These daily payments are variation margin. On one WTI contract of 1,000 barrels, each $1 change in the settlement price is $1,000 into or out of your account. The CFTC's own description of futures markets stresses this end-of-day adjustment, and it warns that traders can be required to pay more than they invested initially.

A worked example: one long crude contract

Suppose a trader buys one WTI contract and deposits $6,000. The figure below follows the account's equity over six trading days if no money is added, using an illustrative path for the price: from the entry price, settlements end each day $1.50, $2.20, $3.40 and $1.00 lower, and then $0.80 and $2.10 higher.

Now add an illustrative maintenance level of $4,500 and follow the cash day by day.

Check the totals. The trader deposited $6,000 + $2,200 = $8,200 and ends with $10,300, a gain of $2,100 — exactly the $2.10 rise in the price times 1,000 barrels. The six daily variation-margin payments also sum to +$2,100. The bars in the figure show what the account would have looked like without the Day 2 deposit: on Day 3 equity would have been $2,600, far below maintenance, and the broker would have been entitled to close the position at a $3,400 loss, so the later recovery would never have been captured.

Three things this example teaches:

1. The call restores the initial level, not the maintenance level. On Day 2 the account was $700 below $4,500, but the call was for $2,200, enough to get back to $6,000. That is the common practice; your broker's agreement sets the exact rule.
2. Being right eventually is not enough. The trade ended profitable, but only for a trader who had the cash to meet the call on Day 2.
3. Gains are usable immediately. By Day 6 the account holds $4,300 more than the initial margin, which the trader could withdraw or use, because profits are credited in cash the same day.

Margin calls and forced liquidation

A margin call is the broker's demand for more money when equity falls below the maintenance level. The trader can meet it by depositing cash or by reducing the position. If the call is not met in time — and brokers set their own deadlines, which can be within the same day in a fast market — the broker can close positions without asking. Many brokers also monitor accounts during the session and liquidate before the evening settlement if losses mount quickly.

If prices gap past the account's equity, the liquidation can leave a negative balance, which the trader owes the broker. That is how a futures trader can lose more than the deposit. Stock margin has its own rules for calls under Regulation T and FINRA; those are covered in Margin calls: when they trigger, how to calculate them, what to do, and they are not the same as futures rules.

Measuring leverage

At the October 30, 2026 weekly close of $104.10, one WTI contract has a notional value of 1,000 × $104.10 = $104,100. Against the illustrative $6,000 deposit:

• Leverage is $104,100 ÷ $6,000 ≈ 17.4 times.
• A 1% move in crude, about $1.04, changes equity by about $1,041, or roughly 17% of the deposit.
• A fall of $6.00 a barrel, about 5.8%, wipes out the entire $6,000.

How likely is a 5.8% move? In Finabase's weekly data for the front-month contract, crude went from a weekly close of $59.12 in the first week of January 2026 to $111.54 in the week of March 30, 2026, and from $120.67 (week of June 6, 2022) to the $56.66 low of the week of December 15, 2025. Moves of several dollars in a week are ordinary for this market.

The leverage you choose is not fixed by the contract. A trader who keeps $104,100 in the account for one contract has no leverage at all: a 10% fall costs 10% of the account. A trader who keeps only the minimum has the full 17-times exposure. Sizing a position by the notional value rather than by the margin is the most useful habit in futures; see Position sizing: how many shares to buy for a set risk.

Who sets margins, and who regulates them

In the US, futures exchanges and their clearinghouses operate under the Commodity Futures Trading Commission (CFTC), the federal regulator. Brokers that hold customer money for futures trading are futures commission merchants and must be members of the National Futures Association (NFA), the industry's self-regulatory organization. The clearinghouse sets minimum margins for each contract; brokers may set higher "house" margins, and often do for retail accounts or before major events. Before opening an account you can look up any firm or individual in NFA's BASIC database, which shows registration status and disciplinary history.

Pitfalls and limitations

• Margin is not the risk. The risk is the notional value. A $6,000 deposit on a $104,100 position is a $104,100 bet on crude.
• Margins rise when you can least afford it. Clearinghouses tend to raise requirements after big moves, so a trader with a loss can face a higher requirement at the same time.
• Losses can exceed deposits. Gaps, limit moves and thin overnight markets can carry equity below zero before a liquidation fills.
• Day-trading margins are not overnight margins. Some brokers offer much lower intraday margins and switch to full requirements at the close, which can trigger liquidation at the end of the session.
• The illustrative numbers above are only that. Real initial and maintenance levels differ by contract and month and change over time.

Futures margin compared with stock margin and options

See Options basics: how calls and puts work, with payoff diagrams for how option buyers cap their loss at the premium.

How Finabase does it

Finabase does not hold futures accounts, compute margin or send margin calls. What it does show is the price you would be marked against: the Futures page lists 61 contracts with the day's change and returns from one week to two years, and each one opens a symbol page — for example WTI crude, CRUDEOILWTI=F — with a quote and a chart. To turn a price move into dollars on one contract, multiply it by the contract size from the exchange's specification (1,000 barrels for WTI). The quotes are continuous front-month prices and do not show a contract's margin requirement or expiry. The margin figure and table in this article are illustrative numbers of our own; the crude prices quoted come from Finabase's chart data.

Frequently asked questions

Is futures margin a loan?

No. Futures margin is a deposit that guarantees you can cover losses; the broker does not lend you the rest of the contract's value, and no interest is charged on it.

What is the difference between initial and maintenance margin?

Initial margin is what you need to open a position; maintenance margin is the lower level the account must stay above. Falling below maintenance triggers a margin call, usually for enough to get back to the initial level.

Can I lose more than my margin on a futures trade?

Yes. If the price moves far enough before the position is closed, losses can exceed the deposit and leave a negative balance that you owe the broker.

What is variation margin?

Variation margin is the daily cash payment that settles each day's gain or loss. On one WTI contract, every $1 change in the settlement price moves $1,000 into or out of the account.

How do I calculate the leverage of a futures position?

Divide the contract's notional value by the margin you have posted. One WTI contract at $104.10 is worth $104,100, so with $6,000 posted the leverage is about 17 to 1.

Summary

Futures margin is a performance bond, not a loan: you post initial margin to open a position, keep equity above maintenance margin, and settle gains and losses in cash every day as variation margin. A margin call asks you to restore the account, usually to the initial level, and an unmet call ends in forced liquidation. Because the deposit is small next to the contract — an illustrative $6,000 against $104,100 of crude oil, about 17 to 1 — a move of under 6% can erase it, and losses can run past it. Measure risk by the notional value, check current margins with the clearinghouse and your broker, and verify any broker through NFA's BASIC before you trade.