A demand to restore account equity to the initial margin level after daily settlement leaves it below maintenance, payable in cash, usually within one business day.
Futures margin is a performance bond, not a loan, so a call is not a request to repay borrowings; it is a demand for fresh collateral. Losses are already gone, swept out overnight as variation-margin. The call restores the cushion.
The critical detail is the level you must return to. Falling below maintenance-margin triggers the call, but you must top up all the way to initial-margin, not merely back above maintenance. Traders who fund only to maintenance get called again on the next adverse tick.
Failure to meet the call within the deadline gives the broker the right to close positions at market under auto-liquidation, and any resulting debit is still owed.
Example: 3 ES contracts at $13,200 initial and $12,000 maintenance means $39,600 required, $36,000 maintenance. Equity of $37,500 is above maintenance and fine. A 40-point loss takes equity to $31,500 — below maintenance, so the call is for $8,100 to restore $39,600, not $4,500.
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.Buying a call: payoff at expiry. A 105-strike call bought for 3 loses that whole 3 if the price finishes at or below 105, breaks even at 108, then gains a dollar for every dollar higher. The loss is capped at the premium; the upside is not capped.
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