Comment on SPAN Calculator

Nithin Kamath commented on 20 Jul 2013, 11:44 AM

I got your point,

The thing is that in real market the premium that you received on your writing position will be credited to you only the next day, so that much extra will be blocked in your real market scenario.

In SPAN calculator, it calculates considering the fact that premium is going to be credited and hence will show lesser margin.

So in your example, SPAN shows 29500 , actual is 38000. The actual is showing more because you haven’t yet gotten the credit for the premium you will be receiving from the short option position, which would be around Rs9000 I guess in your case. Once the premium get’s credited the net effect would be Rs 29500 itself.

This margin is including both buy and short option positions. Hopefully, was able to clarify.


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