The Three Numbers That Matter
Initial margin is the deposit required to open a position. Maintenance margin is the level your account must stay above to keep the position. Your cushion is everything above that — the money that absorbs normal adverse moves without forcing you out at the worst moment.
Exchange margins change with volatility, so check current requirements before sizing an account. Micro contracts, where available, cut all of these numbers by roughly a factor of ten and are a legitimate way to start small.
A worked example makes it concrete. Say you want to trade one corn contract with initial margin around $1,500. Funding with $5,000 gives you a $3,500 cushion — roughly 70 cents of adverse move in corn before a margin call, a decent buffer. Funding with $2,000 gives you 10 cents of room, which a single USDA report can consume in minutes. Same contract, same market, completely different probability of surviving long enough to learn.
Why the Cushion Matters More Than the Minimum
Suppose a contract requires $3,000 initial margin. An account with exactly $3,000 can open one contract — and will be on margin call after the first modest losing day. The same trader with $10,000 can sit through ordinary noise, follow a plan, and only exit when the trade idea is actually wrong rather than when the account forces it.
Futures trading involves substantial risk of loss and is not suitable for all investors. Only deposit risk capital — money whose loss would not affect your living expenses or obligations. If losing the deposit would change your life, the amount is wrong no matter what the margin schedule says.
Matching Account Size to Approach
- Learning or testing: micro contracts or simulated trading; a few thousand dollars or none at all.
- One full-size contract at a time: commonly $10,000 to $25,000 depending on the market's margin.
- Multiple positions or spreads: scale up so total margin stays well under half the account.
- Hedging a business exposure: size follows the hedge, not a trading budget — talk with a broker about structure.
Whatever number you land on, remember that brokers can set account minimums and house margins above the exchange's. Ask for the current schedule before you fund, and keep a cash reserve outside the account so one bad stretch never forces you to wire emergency money to survive a position you still believe in.