Margin (Initial, Variation) the capital that must be provided in advance or during the term of the contract in order to trade a financial instrument (future) on the stock exchange. It serves as collateral in the event that a position performs adversely. The initial margin is used to cover a potential loss in value during the period between two margin calls (usually a daily loss). The variation margin covers the change in value that has occurred. Margins are often only required once a certain credit limit has been exceeded; this is also known as the maintenance margin.