Comment on SPAN Calculator

Abhinav Jain commented on 24 Dec 2015, 01:03 AM

Sir,
I appreciate your efforts towards approximately free trading with justified margin requirements for F&O. Zerodha provides margin benefit for playing all types of spreads in futures as well as in options but in some mutilegged neutral option strategies such as shorting straddles, strangles, butterflies and condors, trader’s possible risk can be only one side of market direction and hence only on one leg.

So why all Indian brokers including Zerodha block margin on both legs when the risk is only on one leg. Brokers should block margin on one leg only, wherever margin is higher.

Actually who decides the margin? Is it broker or exchange?
Reference – https://www.tradeking.com/education/options/strategies/short-strangle

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