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SPAN Margin

Let's delve into the world of finance and explore the concept of initial margin for the F&O segment. This margin is not calculated on an individual basis, but rather on a portfolio approach. To perform this calculation, we use a software called SPAN® (Standard Portfolio Analysis of Risk). This powerful tool generates 16 different scenarios by adjusting price and volatility values. It then determines the potential loss the portfolio could face in each scenario. This allows us to make informed decisions and manage risk effectively in the F&O segment.

Exercise Settlement Amount

Understanding the concept of a stock option can be a bit tricky, so let's break it down. The strike price refers to the predetermined price at which an option can be bought ...

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Intermarket Spread

Intermarket spread refers to the variation in price of a particular contract across different exchanges. This difference can arise due to various factors such as market dema...

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American-Style Option

This type of contract provides flexibility for the holder to take advantage of the underlying asset's price movements. Let's dive into a fascinating aspect of finance - opti...

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Call Option

A call option grants the holder the right, but not the obligation, to purchase a stock at a predetermined price during a specific timeframe. It is commonly used by investors...

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