Margin system is an important means of risk management in futures market. In futures trading, the buyer and seller of futures must pay a certain proportion of the value of the futures contract (usually 5%- 15%) for settlement and guarantee performance. In China, the margin paid by futures traders can be funds or securities with stable value and strong liquidity, such as standard warehouse receipts or treasury bonds.

Margin is a way to improve purchasing power by using leverage ratio.

Futures margin system

Characteristics of international futures margin system

The characteristic of the margin system in the international futures market is that the risk is directly proportional to the margin. Generally speaking, the greater the risk faced by traders, the more margin they need. The exchange will also set the minimum margin standard according to the characteristics of the contract, and can adjust the margin level according to the market risk. Moreover, the deposit collection is carried out in stages. Generally speaking, the exchange or clearing institution only collects the deposit from the members, that is, the member deposit, while the futures company collects the deposit from the customers, that is, the customer deposit.

Characteristics of domestic futures trading margin

The characteristic of domestic futures trading margin is to stipulate different trading margin ratios for different stages of futures contract listing operation, which generally increases with the approach of delivery. With the increase of customers' contract positions and abnormal transactions, the trading margin ratio of this contract will also increase to control market risks. When the contract has a continuous price limit and changes continuously, the margin ratio will increase accordingly.