Using a margin calculator
You can trade in multiples of the initial margin deposited. For example, if the margin is 10 percent, and you want to invest Rs 10 lakh in futures and options, you will need to deposit Rs 1 lakh with the broker. This multiple that you trade in is called leverage.
Of course, margins differ from index to index and share to share. So, you need an F&O calculator to figure out the margin to trade in the equity or index F&O that you want.
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SPAN Margin calculator
Value at Risk margin
Extreme Loss Margin
Angel One Margin Exposure
One more point, from July 2018, SEBI has made it mandatory for all investors to block sufficient margin amount (SPAN+ Exposure) before placing an order. Failing to meet the threshold will attract a margin penalty.
Who collects SPAN and exposure margin?
SPAN is Standard Portfolio Analysis of Risk is the minimum margin requisite calculated basis risk and volatility of the underlying has derived its name from the software used to evaluate it.
On top of the SPAN margin, the broker would also collect an exposure margin, an additional cushion, to protect the broker’s liability against wild price swings. The total margin is the sum of SPAN and exposure margin.
How can SPAN margins be paid?
SEBI needs brokers to collect margin upfront before traders can take a position in the market. Failing to comply with the new norms would attract a margin penalty.
What is exposure margin?
Exposure margin is an ad-hoc amount over and above SPAN, collected at the discretion of the broker as protection against broker’s liability that may arise from erratic market swings.
What is the spread benefit?
The spread contract allows investors the benefit of entering two calendar contracts simultaneously without the risk of partial execution at lower impact cost.
FAQs - Frequently Asked Questions
What is a margin for F&O?
The margin collected at the beginning of the trade is called initial margin, calculated on basis of the assumption that you will hold the position till the expiry date.
What is the SPAN margin requirement and how it is measured?
- Underlying risk
- Historical volatility of the underlier
What is the calendar spread margin for F&O?
Total margin = SPAN Margin + Calendar spread charge+ Exposure margin
The margin is calculated on the delta of the spread. In a calendar spread, the margin value equates the one-third of the mark to market value of the far month contract.
How is the margin calculated?
What is a margin calculator?
How to use a margin calculator in Angel One?
What is the margin requirement to transact in the cash market?
You can pledge existing securities in your DEMAT account as collateral. Ask your broker for a complete updated list of investment instruments that you can use as collateral.