Margin Calculator

Frequently Asked Questions

• Q. What is the SPAN margin calculator?

  A. The SPAN margin calculator helps traders compute the margin (capital) required for initiating a trade in the NSE equity derivatives, commodity derivatives, and currency derivatives segments before actually taking the trade.

• Q. How does the SPAN margin calculator work?

  A. The objective of SPAN is to identify the overall risk in a portfolio of futures and options contracts for each member.

  In standard pricing models, three factors most directly affect the value of an option at a given point in time:

  1. Underlying market price
  2. Volatility (variability) of underlying instrument
  3. Time to expiration

  As these factors change, so too will the value of futures and options maintained within the portfolio. SPAN constructs scenarios of probable changes in underlying prices and volatilities to identify the largest loss a portfolio might suffer from one day to the next. It then sets the margin (capital) requirement at a level sufficient to cover this one-day loss.

• Q. How is the F&O margin calculated?

  A. To calculate the F&O margin, select the exchange, segment, ticker, the direction of trade (buy/sell), and quantity in the margin calculator. Once the details are entered, you will see the required margin (capital) for initiating the trade.

• Q. What are margins in equity?

  A. In equity trading, margins are referred to as leverage. You are allowed to buy stocks by paying a marginal amount of the actual value. On RMoney, you can place intraday orders with up to 5x* leverage on selected NSE 500 stocks.

  *Please note: Leverages are subject to change without prior notice at RMoney's discretion.

• Q. What is the upfront margin?

  A. Upfront margin refers to the initial margin that must be deposited on the trading day if you wish to trade in any registered segments.

  The following are considered upfront margin:

  1. Funds available in the trading ledger with RMoney.
  2. Shares pledged as collateral for margin purposes.(only for POA clients.)

  *A change is this system shall become applicable in the near future. Clients shall be appropriately informed about such change in advance.

• Q. What is the exposure margin?

  A. The exposure margin is an additional margin blocked over and above the SPAN margin to cushion against any Mark-to-Market (MTM) losses. Both SPAN and exposure margins are specified by the exchange. At the time of initiating a futures trade, the client must meet the initial margin requirement (SPAN + Exposure), which is blocked by the exchange.

• Q. What is the value at risk (VaR) margin?

  A. The value at risk (VaR) margin is a measure of risk used to estimate the probability of loss for a share or portfolio, based on statistical analysis of historical price trends and volatilities.

  To calculate VaR margin, the following parameters are considered:

  1. Confidence level
  2. Time horizon
  3. Estimate of loss

  VaR margin is published by exchanges multiple times during the day based on stock price movements.

• Q. What is the extreme loss margin?

  A. The extreme loss margin aims to cover losses that could occur outside the scope of VaR margins.

• Q. What is a ticker?

  A.A ticker is a symbol or unique combination of letters and numbers representing a specific stock. For example, the ticker for Reliance Industries Limited is RIL.

• Q. What is the net premium margin?

  A. The net option premium is the total amount a trader will pay for selling one or more options and simultaneously purchasing others. The combination can include any number of puts and calls and their respective positions.