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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

25
1 Lot
1 Lot100 Lots
₹22,500
10%
1%50%

Margin Summary

Contract Value
₹5.63 L
Total Qty
25
SPAN Margin₹53,438
Exposure Margin₹2,813
Total Margin Required₹56,250
Effective Leverage
10.0x
With Broker Leverage
10.0x

Risk Analysis

1% Price Move P&L:±₹5,625
5% Price Move P&L:±₹28,125
ROI on 1% Move:10.0%
Margin Call at:₹39,375

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.

What is Margin Calculator, and How Does it Help You

Understanding product margins is a fundamental requirement for business success. Profit margin measures how much out of every rupee of sales a company keeps in earnings. Markup, on the other hand, is the percentage added to the cost price to determine the selling price. Conflating these two metrics can lead to pricing errors.

The Margin Calculator is a business tool designed to calculate profit margins, markups, gross profit, and revenue. It helps you set the correct selling prices for your products.

Gross Profit Tracker

Calculate gross profit margins and markup percentages side-by-side from cost and sale price.

Revenue and Cost Solver

Enter target margin and cost price to solve for the required selling price.

Retail Price Optimizer

Ensure pricing covers business expenses and generates optimal profit margins.

How Does the Margin Calculator Work?

The calculator applies standard margin and markup percentage formulas to product costs and revenues.

Margin% = (Profit / Revenue) * 100, Markup% = (Profit / Cost) * 100

Revenue: The selling price or total sales value of the product
Cost: The purchase price or production cost of the product
Profit: Gross profit amount (Revenue minus Cost)
Margin%: Gross profit margin expressed as a percentage of selling price

If a product costs ₹80 to manufacture and you sell it for ₹120, your profit is ₹40. The calculator computes: Margin% = (40 / 120) * 100 = 33.33%. The Markup% = (40 / 80) * 100 = 50%.

How to Use Margin Calculator

Using the Margin Calculator is extremely simple and takes just a few seconds. Follow these steps:

1

Select Input Fields

Choose the two variables you know (e.g., Cost and Margin, or Cost and Selling Price).

2

Enter Values

Input the numbers in the respective fields.

3

Analyze Profit Metrics

The tool instantly displays the missing values: Selling Price, Markup, Margin, and Profit.

Advantages of Using Margin Calculator

✓ Accurate Retail Pricing

Ensure your product prices generate the required gross profit to sustain operations.

✓ Avoid Loss-Making Sales

Know if offering discounts will eat up too much profit margin before setting promo pricing.

✓ Verify Vendor Markups

Wholesalers and retailers can verify markups and wholesale discounts quickly.

✓ Clean Financial Planning

Align pricing with business cash flow targets and margin goals.

Frequently Asked Questions

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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.