Margin Requirements

Margin requirements are the minimum amount of money an investor must deposit to open or maintain a position in a leveraged investment, like a stock or futures contract. Think of it as a security deposit that ensures the investor can cover potential losses. Brokers set these limits to manage risk, and they can vary based on the type of investment and market conditions. Essentially, margin requirements help ensure that investors have enough equity in their accounts to support their trades and prevent excessive borrowing that could lead to large losses.