Margin Calculator
Calculate F&O margin requirements including SPAN, exposure, and VAR margins. Understand leverage, risk, and margin call levels for derivatives trading.
Position Details
Margin Summary
Risk Analysis
Understanding Margin Types
SPAN Margin
Standard Portfolio Analysis of Risk (SPAN) margin covers the worst-case scenario loss for a day. It's the primary margin component, calculated by exchange using complex risk models.
Exposure Margin
Additional margin to cover volatility and MTM losses beyond SPAN. Typically 3-5% for index and 5-10% for stock F&O. Also called Extreme Loss Margin (ELM).
VAR Margin
Value at Risk margin covers potential loss based on historical volatility. Applied to equity delivery trades. VAR + ELM together form the total margin requirement.
Margin Trading Guide
What is Margin?
Margin is the collateral required to open and maintain F&O positions. It allows trading with leverage - controlling a large position with smaller capital. For Nifty Futures at 10% margin, you control ₹5.6L contract with just ₹56,000.
Leverage Double-Edged
With 10x leverage (10% margin), a 1% market move equals 10% profit/loss on your margin. A 5% adverse move wipes out 50% of margin. Always use stop-losses and position sizing to manage leveraged risk.
Margin Call
When losses reduce margin below minimum (usually 70-80% of initial), broker issues margin call. You must add funds or reduce position. If unmet, broker can square off positions at market price, potentially locking in losses.
Peak Margin Rules
SEBI mandates upfront 100% margin collection. Brokers check margin 4 times daily at random intervals. Penalties for margin shortfall: 0.5% for ₹1L-10L shortfall, 1% above ₹10L. Maintain buffer margin to avoid penalties.
Frequently Asked Questions
What is margin in F&O trading?
Margin is the collateral (cash or approved securities) required to open and maintain futures and options positions. It acts as a security deposit against potential losses. Typically 10-20% of contract value for index F&O and 15-40% for stock F&O.
What is SPAN margin?
SPAN (Standard Portfolio Analysis of Risk) margin is calculated by exchanges using a complex algorithm that estimates maximum one-day loss. It considers price movement, volatility, and correlations. SPAN is the primary margin component for F&O positions.
What is exposure margin?
Exposure margin (or ELM - Extreme Loss Margin) is additional margin over SPAN to cover extreme price movements and MTM losses. It's typically 3-5% for index F&O and 5-10% for stock F&O. Total margin = SPAN + Exposure margin.
What happens if I don't maintain margin?
If margin falls below minimum (typically 70-80% of initial), you receive a margin call. You must add funds immediately. If not met, broker can square off positions at market price without your consent, potentially locking in losses.
What is leverage in F&O?
Leverage = Contract Value / Margin Required. With 10% margin (10x leverage), you control ₹10L position with ₹1L. This amplifies both profits and losses. A 1% market move = 10% P&L on your margin. Higher leverage = higher risk.
How is options selling margin calculated?
Options sellers (writers) require higher margins as losses can be unlimited. Margin includes SPAN margin based on premium + underlying volatility, exposure margin, and sometimes premium margin. Buying options only requires paying the premium.
What are peak margin rules?
SEBI mandates 100% upfront margin collection. Exchanges check margin 4 times daily at random. Penalties: 0.5% for ₹1L-10L shortfall, 1% above ₹10L shortfall per day. Brokers may require additional buffer margin to avoid penalties.
Can I use shares as margin?
Yes, approved shares can be pledged as margin collateral. Brokers accept 50-90% of share value (haircut varies). You still own the shares and receive dividends. However, at least 50% of total margin must be in cash for F&O trades.
Why does margin change during the day?
Margins are dynamic. SPAN recalculates based on real-time price and volatility. During high volatility (results, events), exchanges may increase margins by 50-100%. EOD margin is usually lower than intraday peak margin.
What is MTM (Mark to Market)?
MTM is daily settlement of futures positions. Profits are credited and losses debited based on closing price vs your entry/previous close. If losses exceed margin, you need to add funds. Options don't have MTM as premium is paid upfront.
How much margin do I need for Nifty Futures?
Nifty Futures margin is typically 10-12% of contract value. For Nifty at 22,000 with lot size 25, contract value = ₹5.5L. At 10% margin = ₹55,000. Bank Nifty requires higher margin (12-15%) due to higher volatility.
Is intraday margin lower than overnight?
Some brokers offer lower intraday margins (MIS) for positions squared off same day. However, SEBI peak margin rules apply to intraday too. Overnight/NRML positions require full exchange-mandated margins. Check broker's margin policies.