In commodities market, future contracts for various commodities are traded with an initial margin amount. A trader gets live access to the price of a commodity based on the globally traded price of that particular commodity. Each commodity has a minimum contract size in which it is traded. The monetary value of a contract changes with the change in the international price of the commodity.

Here goes an example of Gold:
The contract size of Gold is 1Kg which suppose is worth Rs. 25 lakhs, whereas the margin requirement is Rs. 75,000.

Supposing, a contract is bought with an initial deposit of Rs. 100,000 at the rate of Rs. 29,000/10gm. If the price moves upwards to Rs. 29,500 and the investor decides to sell the holding, he/she books the profit of Rs.50,000 in a contract.

Incase of a downturn of price, an investor will be asked to put in more margin amount if the loss exceeds Rs. 25,000 as Rs. 75,000 is the margin requirement. Or, will be given the option of selling the holding at the current market price. However, by putting in more margin amount, an investor can observe the price to move upwards, which in a span of time can yield profits.