When you work with exchange traded derivatives (futures and options) you encounter margin level which allows to offset the default risk from counter parties.

Margin call, Maintenance Margin & Initial Futures Margin

Initial (Futures) Margin – the initial amount of funds which must be on your (your firm’s) trading (brokerage) account at the moment of opening a position in the market.

Maintenance Margin – the minimum amount of money on your account after you opened a position.

When the market price moves in unfavorable for you way, your cash balance in the account decrease. If the cash balance will derease till the certain level, called maintenance margin (level), you will be asked to add funds (margin call) in order to reach initial margin level or your position will be closed. Usually, in case of margin call for small account holders brokers just close the position.

Lets be clear regarding Margin Call – it is a moment when you are asked to add funds in order to reach the initial margin level or your position will be closed at the market price. You can decide to add funds or close the position. In US, most EU and other developed countries around the world as a margin you can offer not only currencies but also AAA (or local) governmental bonds. To be precise short term bonds or liquid enough to sell them fast and retrieve the needed amount of money.

You can see the margin and margin call system in the picture. Margin is recalculated every day.

Margin call, Maintenance Margin & Initial Futures Margin

For example, you bought (long) 2 contracts with initial margin of $10000 and maintenance margin of $7000. If the value of your deposited money (and alternatives) will go lower than 7000$, you will be asked to add funds fast or your position will be closed. For most people after you reach maintenance margin your position will be closed .

Very often the margin level is calculated using SPAN (Standard Portfolio Analysis of Risk).  As far as I know CME GROUP and Intercontinental Exchange use this method.

The specification of instruments and the margin levels you can find at ICE and COMEX group websites.