Comment on Zerodha F&O margin Calculator

Nithin Kamath commented on 06 Oct 2014, 09:26 PM

Vinayak, exchange while determining the risk also has to consider the risk of trade execution. What SPAN calculator shows is what exchange asks us to block.

What happens, if you first exit puts? Now you will have long futures with unlimited risk with only a portion of actual margin blocked. The same thing can happen if liquidity of puts completely dries up.

So unless the spreads itself trade on the exchange, margin won’t get reduced to the extent that you are looking at.

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