Performance Bonds/Margins

There two different kinds of margin that a market participant should be aware of. Initial margin is the up-front payment, a percentage of the trade price, made prior to a market transaction when purchasing on that margin. After the initial margin is met, a market participant is required to keep up maintenance margin.  This is the amount of equity required to retain an open position.   If subsequently margin equity falls below maintenance margin, a call must be issued to bring the account up to initial margin.  

Heightened Risk Profile (“HRP”) initial margin requirements for all products are set at 110% of the maintenance margin requirement for a given product. Non-Heightened Risk Profile (“Non-HRP”) initial margin requirements for all products are set at 100% of the maintenance margin requirement for a given product.

The following table¹ depicts the aforementioned logic in practice:

The maintenance margin requirement for Canadian Heavy Crude (Net Energy) Futures Months 3-6 is $1,400. The Non-HRP initial margin requirement is $1,400, while the HRP initial margin requirement is $1,540 ($1,400*1.1).

¹ For illustration purposes only