Initial Margin Definition

Initial margin is the amount of capital required to open a leveraged position.

What is Initial Margin?

It is set as a percentage of the total position size and varies depending on the asset and leverage offered.

Initial margin differs from maintenance margin, which is the minimum equity required to keep a position open.

Opening a $10,000 position with a 5% initial margin requirement would require $500 of margin.

An illiquid market is one where assets cannot be easily bought or sold without significantly affecting the price.

Implied volatility is the market's expectation of future price fluctuations, derived from options pricing.

An index is a statistical measure representing the performance of a group of assets, such as stocks, used to track a market or sector.