Variation margin is a popular term used in futures trading. Variation margin, also known as Mark to Mark Margin, is additional cash that an investor needs to deposit to their trading account to maintain adequate money for loss deduction after losses have occurred.
*Variation margin is the cash that an investor deposits to his margin accounts to maintain adequate money for loss deduction after losses have occurred.
*There are mainly two rules involved with variation margin, i.e., the maintenance margin level must be at least 25%, and there is no need for transferring variation margin after a certain point of time.
*The variation margin acts as an entity that protects the ones involved with the margin account from incurring losses.