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What is Initial margin?

Initial margin is the margin that is collected upfront at the time of taking a position in futures. It is the sum total of span margin plus exposure margin. The value of initial margin changes every day as it depends on the futures price.

  • Initial Margin = Span Margin + Exposure Margin
  • Span margin=% of contract value
  • Exposure Margin = % of contract value
  • Contract Value=lot size* futures prices
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