Account equity above the total margin requirement, which is what you can actually use to add positions or absorb losses.
Platforms display this as available margin or buying power, and it updates with every tick because futures are mark-to-market continuously. When excess reaches zero you are at the liquidation threshold.
Treating excess equity as an indication of how much you can trade is exactly the mistake that kills accounts. It answers "how many contracts will the system let me hold", not "how many should I hold", which is a position-sizing question.
Example: $25,000 equity with two ES contracts at $15,000 initial each leaves -$5,000 — you could not have opened them overnight. On $500 day margin the same account shows $24,000 of excess and can hold 48 contracts, which is madness.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Margin and leverage. A $5,000 deposit can control a $100,000 position, which is 20:1 leverage. Because the loss is measured on the full $100,000, a 2.5% move against you halves the deposit and brings a margin call, and a 5% move uses all of it.Working out a position size. Three numbers decide how big a trade is: the account, the share of it put at risk, and the distance from entry to stop. One percent of $25,000 is a $250 budget, and a $0.50 stop divides into that 500 times.
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