F&O Margin Calculator
Estimate the margin needed for your trades with our easy-to-use Margin Calculator.
Required Margin
₹0
Margin benefit
₹0
Final margin
₹0
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Quantity (1 Lot = 1)
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What is a Margin Calculator?
A Margin Calculator for Futures and Options (F&O) trading is a tool that helps you estimate the margin to enter trades in the F&O, Currency, and Commodity markets.
Types of Margins
1. SPAN Margin: Standardised Portfolio Analysis of Risk, or SPAN Margin, is important in F&O trading, as it estimates the potential maximum loss that your entire F&O portfolio could have under various market scenarios.
2. Exposure Margin(F&O only): It is an additional margin that some brokers may charge on top of the initial margin. It is a buffer to protect the broker from potential losses in adverse market movements.
3. Value at Risk(VaR) Margin: It reflects the potential loss of an asset, statistically based on historical price movements and volatility.
4. Extreme Loss Margin: It estimates potential losses beyond the VaR margin. It's typically calculated as the higher of two values:
- 5% of the value of the asset's position.
- 1.5 times the standard deviation of the daily logarithmic returns of the asset's price over the last six months.
By understanding these margin requirements and how the Kotak Margin Calculator factors them in, you can make informed decisions about leveraging your capital for F&O, Currency, and Commodity trading strategies.
How to use the Margin Calculator:
You can easily calculate the final margin in a few clicks using this calculator. All you need to do is:
- Select your desired contract for Futures and Options in the search bar (you can edit it whenever you wish to)
- Insert the desired quantity and Buy/Sell option
- Repeat the above 2 steps for adding more contracts
The margin calculator will give you the margin requirement based on the details provided.
Frequently Asked Questions
What is the best way to use margin calculator?
Below are some best ways to use the margin calculator:
- You can use the margin calculator for calculating the minimum possible final margin by checking the best combination of Futures and Options contracts for hedging
- You can simply calculate the final margin that you will need to trade a specific Futures and Options contract
What is Final margin/ SPAN in Futures and Options?
Final Margin or Standard Portfolio Analysis of Risk (SPAN) margin is the amount deposited with the broker while buying or selling Futures and Options contracts. It is calculated using a risk array that determines the gains or losses for each contract under various conditions. The method takes into account profits or losses, volatility, and decrease in expiration time.
What is Margin Benefit?
Margin Benefit refers to the additional margin that can be availed by traders when certain conditions are met. This benefit typically applies to spread positions or hedged positions where the risk is reduced compared to naked positions or single position. For example, if a trader creates position by simultaneously buying and selling options or futures contracts say, Call buy of NIFTY 23000 for the expiry of 28 MAR and Put sell of NIFTY 22500 for the expiry of 28 MAR then, the margin required might be less than the sum of the margins required for the individual legs of the spread. This reduction in margin is the margin benefit. The margin benefit is determined by the exchange based on predefined rules and is intended to reflect the reduced risk of the spread position compared to an equivalent naked position.
How is margin/ SPAN calculated?
It is calculated using a risk array that determines the gains or losses for each contract under various conditions. The method takes into account profits or losses, volatility, and decrease in expiration time.
What is calendar spread margin for Futures and Options?
The calendar spread strategy involves buying and selling derivative contracts of the same underlying asset but with different expiration dates.
What is the Span Margin Requirement and how is it measured?
Standard Portfolio Analysis of Risk (SPAN) margin is the minimum amount of funds required to place an order. It is calculated using a risk array that determines the gains or losses for each contract under various conditions. The method takes into account profits or losses, volatility, and decrease in expiration time.
What is the margin requirement to transact in the cash market?
Margin requirement to transact in the cash market is the money an individual has to pay upfront to buy or sell securities in the cash segment. The amount of margin usually depends on the type of security, broker and the concerned stock exchange.
What is the calendar spread margin for F&O?
The calendar spread strategy involves buying and selling derivative contracts of the same underlying asset but with different expiration dates.
