Is initial margin my maximum loss?

With isolated margin, yes — your initial margin (plus any added margin) is the maximum you can lose. With cross margin, your entire account balance is at risk.

Can I use less than the required initial margin?

No. The initial margin is the minimum required. You can deposit more for a larger buffer against liquidation.

Does initial margin earn interest?

No, your deposited margin does not earn interest. In fact, you pay interest on the borrowed portion of your leveraged position.

Initial Margin — Margin Trading Definition

Initial margin is the minimum collateral you must deposit to open a leveraged trading position. It determines how much leverage you can use and represents your "skin in the game" for the trade.

How Initial Margin Is Calculated

Initial margin is inversely proportional to leverage:

Initial Margin = Position Size / Leverage

Examples:

10x leverage: Initial margin = 10% of position → $1,000 opens a $10,000 position
20x leverage: Initial margin = 5% of position → $500 opens a $10,000 position
100x leverage: Initial margin = 1% of position → $100 opens a $10,000 position

Initial Margin in Different Markets

Crypto Exchanges

Calculated dynamically based on leverage selected
Typically 0.8% to 100% of position value
Can be adjusted per trade on most platforms

US Stock Markets (Reg T)

Initial margin: 50% for long positions
Short selling: 150% (50% margin + 100% of proceeds)
Portfolio margin: Can be as low as 15%

Forex Markets

EU/UK retail: 3.33% (30:1 leverage) for major pairs
Professional accounts: As low as 0.5% (200:1)

Initial vs Maintenance Margin

Initial margin is always higher than maintenance margin:

Initial: What you need to enter a trade
Maintenance: What you need to keep it open

The gap between initial and maintenance margin determines how much the market can move against you before liquidation after opening a position.

Initial Margin