Trading glossary
Margin is the collateral a trader posts to open and hold a leveraged position. Learn how initial margin, maintenance margin, and margin calls work.
Margin is the amount of collateral a trader must set aside to open and hold a leveraged position. Rather than paying the full value of the position, the trader commits a fraction of it, and the rest is effectively borrowed. Margin acts as a good-faith deposit that absorbs losses if the market moves against the position.
Two common terms describe margin requirements. Initial margin is the collateral needed to open a position. Maintenance margin is the minimum collateral that must remain to keep it open. If losses erode the balance below the maintenance level, the position is at risk. The relationship between margin and position size determines how much leverage is in use.
When collateral falls below the maintenance requirement, a trader may face a margin call, a demand to add funds or reduce the position. If it is not met, the position can be liquidated automatically. On Tyrian Trade, margin is explained for education only; the platform does not provide margin accounts, custody, or execution. Markets carry risk, including loss of capital.
Initial margin is the collateral required to open a position, while maintenance margin is the minimum that must remain to keep it open. Falling below the maintenance level can trigger a margin call or liquidation.
They are two sides of the same idea. Posting a smaller margin relative to position size means higher leverage. For example, committing ten percent of a position's value corresponds to roughly ten times leverage on that position.
A margin call is a demand to add collateral or reduce a position after losses erode the balance below the maintenance requirement. If it is not met, the position can be liquidated automatically to prevent further losses.