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Margin, leverage and mark-to-market

8 minute read · By Krishna Avadhani, Vestora Academy · Updated 18 October 2026

To trade futures you deposit initial margin, often only 5-15% of the contract value. Each day the clearing house marks positions to market: gains are added to your account and losses are taken out. If your balance falls below the maintenance level you get a margin call and must deposit more, often within hours.

This leverage magnifies results. With 10% margin, a 10% move against you wipes out your whole deposit, and a larger move means you owe more than you put in. That is why Vestora only teaches futures and never suggests them for personal positions.

Example: one E-mini S&P 500 contract is worth $50 x the index. At an index level of 6,000 that is $300,000 of exposure for a margin deposit that is a small fraction of that.

Key takeaways

  • Initial margin is a small deposit against large exposure.
  • Daily mark-to-market can trigger margin calls.
  • Losses can exceed the money you deposited.

Check your understanding

1. Contract value $200,000, margin 8%. Approximate deposit?

  • $1,600
  • $8,000
  • $16,000
  • $200,000
Show the answer

$16,000. 8% of 200,000 = $16,000.

2. With 8% margin, roughly what price move against you wipes out the deposit?

  • 0.8%
  • 8%
  • 50%
  • 100%
Show the answer

8%. An 8% move equals the full margin.

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General education only, not financial advice. Examples are illustrations. Rules, tax settings and products change; check official sources.