This article explains the role and mechanism of Initial Margin in futures trading.
🔍 What Is Initial Margin?
Initial Margin is the minimum amount of margin required to open a leveraged trading position.
In leveraged trading, traders can open positions larger than their available balance.
The collateral required to open such positions is called the Initial Margin.
⚙ How Initial Margin Works
Initial Margin is the margin required when opening a new position.
It functions as the minimum collateral needed for the trade to be executed.
📊 Example of Initial Margin
For example:
If you use 10× leverage to open a position worth 1000 BNB:
👉 Required Initial Margin: 100 BNB
(Approximately 10% of the total position value)
🛡 Role of Initial Margin
Initial Margin acts as collateral that supports your trading position.
By using leverage, traders can open larger positions with less capital.
However, Initial Margin serves as the financial backing for those positions.
⚠️ Important Note
When using leverage, if the market moves against your position, losses may increase quickly.
It is important to manage your margin and risk carefully when trading with leverage.
If you have further inquiries, please don't hesitate to contact our Support Team via "Contact Us" function.
bitcastle Futures Trading: Initial Margin
