Canadian Derivatives Exchange*

Margin Requirements

Each market participant must obtain from his clients margin deposits. Margins are designed to cover the market risk associated with each participant's position. They are determined using industry-accepted methodologies and designed to provide the desired level of protection to cover market movement on open positions and unsettled operations.

You have probably heard the words "initial margin" and "maintenance margin". The initial margin represents the amount a client must deposit in his account before entering into position in the market. Maintenance margin is the additional amount to deposit in an account in order to bring it back to the required level following market fluctuations. These are more common for the American markets considering their regulation.

The Montréal Exchange sets futures margin rates for brokers. These rates indicates the required minimum amount of margin. A broker may ask from his clients a rate higher than the one determined by MX.

Margin rates for futures contracts are published daily on the Regulatory Division website at https://reg.m-x.ca/en/regulation/futures_margins.