Margin

The money deposited by a client on forward or futures contracts to guarantee performance of the contract. He/she will deposit initial or original margin of between five and twenty per cent when a futures or forward contract is purchased but thereafter on every business day he/she will be liable for additional variation margin if the price of gold moves against him/her. The client may also be liable for maintenance margin, which is the cash balance that must be maintained at all times in forward or futures arrangements.