Using Margin in Futures Trading

What is margin in futures trading?

Futures margin refers to the initial amount of money a trader is required to deposit as a good faith performance bond before entering a futures position.

It serves as a financial mechanism designed to support a trader’s ability to meet potential obligations resulting from price fluctuations in the underlying asset. Futures margin is not a cost or fee, but rather a portion of capital required to open and maintain a position. This mechanism helps exchanges manage risk and supports the orderly functioning of the futures markets. It is important to note that losses can exceed the initial margin amount, and additional funds may be required.

Overnight margin for futures vs. day trading margin

There are also two levels of margin requirements depending on how long a trader expects to be in an open position.

  • Overnight margin is the standard margin requirement set by the exchange for traders who are holding positions overnight through the session close for one or more days.
  • Day trading margin is a reduced margin for day traders to help increase leverage. To qualify for futures day trading margin, the trader must trade during regular market hours and must close the position before the session end time. If you forget to close a position before the end of the session, the standard overnight margin kicks back in and you could be subject to a margin call.

It's important for traders to understand the margin requirements associated with the futures contracts they trade and to monitor their account balance closely to avoid potential margin calls.

View NinjaTrader's margin policy and FAQs.

2 Types Of Margin In Futures Trading

Bank

Initial margin for futures

This is the initial good faith deposit required when opening a futures position. It serves as a performance bond designed to help ensure a trader can meet financial obligations if the price moves unfavorably.

Dollar bill

Maintenance margin for futures

Once a futures position is open, the maintenance margin represents the minimum account balance required to keep the position open. If a trader’s account equity falls below this minimum balance level, the trader may receive a margin call. Please be aware: if you have multiple positions open, your account balance must exceed the maintenance margin required by each open position.

If you receive a margin call, you will be notified by the Trade Desk that funds must be added to your trading account to avoid liquidation of one of more positions.

NinjaTrader Desktop provides direct visibility to your available excess margin, helping you manage your positions to meet margin requirements. Learn how to add visibility to your available margin here.
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What is the relationship between leverage and margin?

Margin and leverage work together to provide the financial framework for futures trading. Leverage is the ability to control a larger position with less capital and a key differentiator of trading futures versus other asset classes. 

While margin is the required amount of money needed in your account to open and maintain a position, the associated leverage available provides much greater buying power, allowing you to put on more positions and trade larger numbers of contracts than otherwise possible.

Although increased leverage allows for potentially greater profits, it also comes with increased risk and the potential for greater losses. Defining a risk management strategy is a beneficial step to help traders protect their accounts.


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Every NinjaTrader account includes free unlimited simulated trading that allows you to build your experience with key concepts such as margin, contract specifications, order placement, and more. 

  • No minimum funding requirement to open your account*
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  • Trade risk-free in our simulation environment until you're ready for live trading

*ACH and debit card transfers are subject to a $5.00 minimum.

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Frequently Asked Questions About Margins in Futures Trading

Margins and stock margins may sound similar, but there are fundamental differences between these two concepts. A futures margin is a good faith deposit that sets aside funds already in your account to protect against losses. On the other hand, a stock margin is a loan from your broker against the stock that allows you to buy shares; your broker then charges you interest for this loan. Because you're using your own funds for futures margin, there is no interest charge on futures.
Excess margin in futures refers to the amount of money available in your account that is above the maintenance margin requirements for all open positions. This is important, because not having enough excess margin means you may not have enough money to cover losses if the market moves against your positions and triggers a margin call. NinjaTrader’s platform displays excess margin on the accounts tab of the NinjaTrader Desktop control center, so you can keep a close eye on your margin requirements at all times.
An intraday margin is the minimum balance your account must maintain per contract while in a trade during normal U.S. trading hours. This is one of the key types of margins in futures for day trading. Learn more about how intraday margins work and the effect they can have on your trading activity.
Overnight positions are trades that are not closed prior to the end of the normal U.S. trading session. Holding positions overnight or over the weekend introduces an extra element of risk, since these positions expose you to potential negative price movement during the time the market is closed. This will also have an effect on your margin requirements, as you move from day trading margin to overnight margin, and could create a potential margin call if your account lacks the funds needed for this additional margin. This is why we suggest always being cautious and aware when holding a position overnight.