Initial margin

(1) The initial margin generally represents a few percentage units of the value of the futures contract. For example, as regards a ten-year government of Canada bond futures contract (CGB) on a $100,000 notional, the initial margin in January 2009 was in the $3,000 range, more specifically $3,350 for speculative positions and $3,150 for hedged positions. (2) A distinction is sometimes made between the original margin paid to the clearing house by the broker and the initial margin paid to the broker by the client. (3) Brokers are generally required to ensure their clients have an initial margin at least equal to the amount required by exchange rules.