Day Trading Margins Vs. Maintenance and Initial Margins

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