In relation to a futures-style option (a futures contract on an option-like payoff), and similar to a standard futures contract, a contractual requirement that both the purchaser (long) and the seller (short) of a commodity option post a risk-based, original/ initial margin upon entering into an option position. Over the lifespan of the option, the option value is marked to market daily, and any gains and losses that may arise will be posted to the accounts of the long and short position holders,  as the case might be.

The contract is marked to market on a daily basis, and the long (short) parties’ margin accounts are credited (debited) with any increase in the futures option price. That is, the final settlement amount is the option’s payoff. The buyer of a futures-style option posts margin as is usually done in trading standard futures contracts.