Futures are leveraged derivative contracts. Margin is not a deposit or a part-payment — it is collateral against a position whose full exposure is far larger than the margin posted, and that distinction is where inexperienced traders lose more than they expected to be able to lose.
This page explains how margin works, what an account requires, and what the leverage actually means for your money.
Eligibility Requirements at a Glance
What is generally required to trade futures in South Africa.
- An account with a member of an authorised exchange, or an FSCA-authorised financial services provider
- Be 18 or older with a valid South African ID
- FICA verification, including proof of address and source of funds
- Completion of the provider’s appropriateness or suitability assessment
- Sufficient funds to meet initial margin and to sustain variation margin calls
- Acceptance of the client agreement, risk disclosure and margin terms
- Compliance with exchange control where offshore instruments are involved
- Tax registration, since gains are taxable
Income and Affordability Requirements
Initial margin is collateral, not cost. It is the amount required to open a position, calculated on the contract’s risk. The exposure you carry is the full contract value, which is a multiple of the margin.
Variation margin is settled continuously. Positions are marked to market and losses are debited to your account, commonly daily or intraday. If the account falls below the required level you receive a margin call, and if it is not met the position can be closed out without further reference to you.
Losses are not limited to the margin posted. This is the point people miss. A gap in the market can leave a position closed at a level that produces a debit balance — a debt to the broker — larger than the money you put up. Read the client agreement on negative balances specifically.
Margin requirements change. Exchanges and clearing houses raise margin when volatility rises, which is exactly when your account is already under pressure. A position sized to the current margin can become under-margined without you doing anything.
Confirm the current margin requirements with the exchange and your broker. They are set by the clearing house and the broker, differ by contract, and are revised.
Verify the provider before depositing anything. Check authorisation with the Financial Sector Conduct Authority and, for exchange-traded products, that the firm is a member of the relevant exchange. Offshore platforms soliciting South African clients are common, and an unregulated counterparty means no recourse.
Credit and Financial Requirements
Leverage magnifies both directions and the downside is the one that ends accounts. A small adverse move against a leveraged position can wipe out the margin entirely. Most retail traders in leveraged derivatives lose money, and that is a documented pattern rather than a caution.
Position sizing is the whole discipline. The question is not what margin allows but what loss you can absorb. Sizing to the maximum the margin permits is how accounts are closed.
Keep spare cash for margin calls. An account funded to exactly the initial margin has no capacity to survive an adverse move, and forced closure at the worst moment is the usual outcome.
Understand the contract before trading it. Contract size, tick value, expiry, settlement method — whether it settles in cash or in the physical asset — and the trading hours. A physically settled contract held to expiry has consequences.
Never trade with borrowed money. Using credit, a bond facility or a personal loan to fund a margin account combines two leverages and is how people lose homes.
Advice is regulated. Anyone advising you on financial products must comply with the Financial Advisory and Intermediary Services Act 37 of 2002, and you are entitled to disclosure of how they are paid. Social media traders, signal groups and copy-trading promoters offering advice without authorisation are operating unlawfully, and paying them is not an investment.
Gains are taxable. Derivative gains are generally taxed, and the treatment depends on the circumstances. Keep complete records and take advice from a registered tax practitioner rather than assuming.
Documents and Verification Required
The account opening document set.
- South African ID document, smart ID card or valid passport with a permit
- Latest payslip, or the latest three where income varies
- Latest three months’ bank statements, or electronic retrieval consent
- Proof of residence, where the provider requires it
- Exact banking details for payout and the debit order mandate
- A cellphone you control, for one-time PIN verification
- Proof of residential address for FICA
- Evidence of source of funds
- Your tax reference number and tax residency status
- Completed appropriateness or suitability questionnaire
- Signed client agreement, risk disclosure and margin terms
- Bank account details in your own name for deposits and withdrawals
How to Apply and Improve Approval Readiness
Open the account with an FSCA-authorised provider, read the margin terms and the negative balance provisions before funding, and start with position sizes far below what the margin permits.
If you are new to this, the honest first step is to understand that leveraged derivatives are not an investment product for building wealth steadily — they are a risk-transfer instrument, and most retail participants lose money. Nothing on this page is advice about whether to trade; it is about what the mechanics are.
- Verify the provider’s authorisation with the FSCA before depositing
- Read the client agreement on negative balances specifically
- Understand that losses can exceed the margin you posted
- Confirm current margin requirements with the broker and exchange
- Expect margin requirements to rise when volatility rises
- Size positions to the loss you can absorb, not to what margin allows
- Keep spare cash for margin calls
- Understand contract size, tick value, expiry and settlement
- Never fund a margin account with borrowed money
- Keep complete records and take tax advice from a registered practitioner
Frequently Asked Questions
Is margin a deposit?
No. It is collateral against a position whose full exposure is a multiple of the margin. The amount at risk is the contract value, not the margin.
Can I lose more than I put in?
Yes. A market gap can close a position at a level producing a debit balance owed to the broker. Read the client agreement on negative balances before funding.
Do margin requirements stay fixed?
No. Clearing houses and brokers raise margin when volatility rises — exactly when your account is already under pressure. A position can become under-margined without you doing anything.
How do I check a provider?
Confirm authorisation with the Financial Sector Conduct Authority, and for exchange-traded products that the firm is a member of the relevant exchange. An unregulated counterparty means no recourse.
Margin requirements, contract specifications, account criteria and regulatory obligations are set by the exchanges, clearing houses, brokers and the Financial Sector Conduct Authority, and are revised. Confirm current requirements with each, and take advice from an authorised adviser and a registered tax practitioner.