Span Margin Calculator
Combined Margin Requirement
Span Margin: Rs. 0.00
Exposure Margin: Rs. 0.00
Total Margin: Rs. 0.00
| Exchange | Symbol | Product | Strike | Option Type | Net Qty | Price | Span Margin | Exposure Margin | Total Margin | Action |
|---|
Understanding the Span Margin Calculator for NFO Futures & Options
The Span Margin Calculator is a vital tool for traders who engage in Futures & Options (F&O) trading, helping them determine the margin required for a specific position. This margin is required by the exchange to mitigate potential losses during market volatility. Here’s how the Span Margin Calculator works and how to use it effectively.
Key Parameters in the Span Margin Calculator:
Exchange: This refers to the trading platform you are using for your F&O trading. For example, NFO stands for NSE F&O (National Stock Exchange Futures & Options).
Product: The type of instrument you are trading. For example:
- FUTURE: A type of contract that obligates the buyer to purchase, and the seller to sell, an asset at a predetermined future date and price.
Symbol: The underlying asset or index. In this case, NIFTY is used, which is a popular stock market index in India.
Strike Price: This is the price at which the option contract can be exercised. For example, 18100.
Option Type: The type of option contract, which can either be a Call (CE) or a Put (PE). Here, we are considering a Call Option (CE).
Net Quantity: This refers to the number of contracts (or units) you’re buying or selling. In this example, 1 unit is being considered.
Action: Specifies whether you’re Buying or Selling the contract.
Price: The current price at which the asset or contract is being traded. This price must be entered to calculate the margin required for the position.
How the Span Margin Works:
Margin Requirement: The margin is essentially the amount of money that the trader must deposit to open a position. The Span Margin includes the initial margin plus any additional margins (like exposure margin) depending on market conditions and position size.
Importance: The Span Margin ensures that you have sufficient funds to cover any losses that might arise from holding an open position. It helps reduce the risk for both the trader and the exchange.