Things To Know About SPAN Margin

SPAN Margin in Options Trading is a function as collateral to protect against all possible adverse price movements. The SPAN margin is the minimum margin essential to transact F&O Trading (Futures and Options Trading) in the Market. 

The Span is also known as the margin requirement for standard calculations of the risk in a Portfolio. The Span (Standard Portfolio Analysis of Risk) is a handy tool for F&O options trading to calculate the risks and margin of the portfolio. 

Here Is The SPAN Margin Calculation Formula

Total Value of the Trade * Margin Requirement. 

If you do the sum of the SPAN margin along with the exposure margin you get the initial margin. The value of the initial margin depends on the future price and it can vary daily. 

Margin Rules To Know…

1. The margin in Index futures contracts is limited to 3% of the total value of the contracts. 
2. The exposure margins in Index future and Index option selling are 2% of the total contract value. 
3. The exposure margins in Stock futures and options selling are 3.5% of the contract value. 

Also Read:

How To Start A Digital Marketing Agency?

About The Author

Sumona

Sumona is a passionate and insightful blogger, known for her captivating writing style and keen eye for detail. With a knack for storytelling, Sumona takes readers on immersive journeys through her blog.

See author's posts