INSIGHTSMaintenance margin is the minimum amount of equity that must be maintained in a margin account to keep a position open. Typically expressed as a percentage of the total market value of the securities or assets held, this margin acts as a safeguard for brokers against potential losses.
When the equity in a margin account falls below this threshold due to adverse price movements, the broker may issue a margin call, requiring the trader to deposit additional funds or liquidate positions to meet the necessary maintenance margin level. Understanding maintenance margin is critical for traders operating with leverage, as it directly affects their ability to maintain open positions and manage risk in fluctuating markets.