Deposit Margin

Deposit margin refers to the amount of money or collateral that a trader must deposit with a broker or exchange to open and maintain a leveraged position, such as in futures or margin trading. It serves as a form of security or guarantee that the trader will fulfill their obligations. The margin requirement is typically a percentage of the total value of the position and is adjusted based on market volatility and the trader's risk profile. Brokers or exchanges can issue margin calls if the value of the trader’s position falls below a certain threshold, requiring them to deposit additional funds to maintain the position.

Example

A trader who wants to buy $10,000 worth of stock on margin may be required to deposit a $2,000 margin (20%) with their broker.