DerivativesInitial Margin Holder (Option Buyer) Expiration Time Derivative Equity Options At-the-money
Exposure Margin
As we continue our exploration of the fascinating world of finance, let's delve deeper into the concept of exposure margin in the F&O segment. This margin serves as an additional layer of protection for our positions, complementing the Initial/SPAN® margin. When it comes to index futures and index option sell positions, the exposure margin is set at 3% of the notional value. However, for individual securities, the margin is higher at 5% or 1.5 standard deviations of the logarithmic returns of the stock over the last six months in the underlying cash market. Keep in mind, this margin is applied to the notional value of a position.
Related terms
Understand the meaning and definition of Initial Margin in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Holder (Option Buyer) in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Expiration Time in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Derivative in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Equity Options in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of At-the-money in the context of stock market, trading, and investments.
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