Day Trading Margins Vs. Maintenance and Initial Margins

[Mod-MattZ]

One question that we are frequently asked is: “How does day trading work, and do I need to have a maintenance margin in my account to day trade?”

Let’s break down the difference between day trading margins and maintenance margins in a simple way.

Day Trading Margins:

• Set by your broker (like Optimus Futures)
• Apply during specific hours (for Optimus, it’s 6PM EDT/5PM CST until 4:45PM the next day)
• If you don’t close your position before the end of the day trading hours, you might face liquidations and the associated fees

Maintenance Margins:

• These apply if you want to hold your position overnight (past 6PM EDT/5PM CST)
• To hold overnight, you need to have enough funds to cover the initial margin
• Initial margin is calculated as maintenance margin × 1.1
• Maintenance margin acts as a buffer; if your account balance drops below it, you’ll need to add funds to meet the initial margin requirement

Important to note:

• If you’re day trading only, maintenance margins don’t apply to you
• However, if your losses exceed 60% of your balance during the trading session, Optimus Futures might liquidate your position (or falls below $100).

If you still have questions, feel free to ask below! The key is to understand your broker’s specific rules and requirements for day trading and holding overnight positions.

Happy trading!

Matt Z
Optimus Futures