It stands for variation margin; the extra money which is required to top off the balance in a margin account to the initial margin following a margin call. If those funds are not provided by the account holder, the broker will close out the position. The money transfer takes place at the end of each trading date (or intraday). It is meant to mark long and short positions (in futures markets) to the market. This is because futures are settled daily by the party who lost money to the winning party. In other words, for long futures, negative variation margin will be paid by the position holder, while he/ she receives the positive variation margin.

In case of short futures, the holder pays the positive margin and receives the negative margin.