Margin Requirements (Performance Bonds)

In financial and commodities markets, a margin is collateral that the holder of a position in securities, options, or futures contracts has to deposit to cover the credit risk represented by his position to his counterparty (most often his broker).
The collateral can be in the form of cash or securities, and it is deposited in a margin account. On U.S. futures exchanges, “margin” was formally called a performance bond.