Every account holder investor/trader in the CFD or currency market is required to put up an initial Margin (deposit) for each contract they trade (Long or short). This applies to both buyers and sellers. This initial margin is returned when the contract is closed out. Initial margins protect the parties against non-payment of losses by the other party. The amount is normally set at a level designed to cover reasonably foreseeable losses on a position between the close of business on one day and the next. The amount of Initial Margin for each contract varies according to the price volatility of the underlying instrument and is based on the initial margin as determined by Sandton Capital Markets.