Zerodha SPAN Calculator

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SPAN Calculator

Traders,

Zerodha SPAN Calculator part of our initiative “Zerodha Margins”  is the first online tool in India that let’s you calculate comprehensive margin requirements for option writing/shorting, futures and multi-leg F&O strategies when trading equity, F&O, Currency and Commodity on NSE and MCX respectively.

Zerodha SPAN will ensure that you never have the following queries again

  • Margin benefit you get for taking calendar spreads (taking opposite positions on different expiry of the same contract)
  • Option writing margins
  • Margin benefit for various multi-leg option strategies like iron condors, straddles, strangles and more

The following post explains various ways in which SPAN can be used,

For Future Margin Requirements

See the example below for Nifty November futures margin requirement.

Total Margin = SPAN + Exposure

Total Margin is the margin required to hold the position overnight or also called NRML margin at Zerodha. If you use the product type as MIS instead of NRML while placing an order you will get additional leverage only for intraday trades. Read our Margin Policy for more.

Zerodha SPAN for Futures Margin

For Calendar Spreads

Calendar spread is a spread trade involving the simultaneous purchase of futures or options expiring a particular date and sale of the same instrument expiring another date or vice versa. Since the position is completely hedged there is a margin benefit for the combined position, as shown in the example below for a calendar spread between Nifty Nov and Nifty Dec futures.

Total Margin = SPAN + Exposure – Spread Benefit(If any)

Total Margin is the margin required to hold the position overnight also called NRML margin at Zerodha. If you use the product type as MIS instead of NRML while placing an order you will get additional leverage only for intraday trades. Read our Margin Policy for more.

Zerodha SPAN for Calendar Spreads

 

 For Option Writing/Shorting Margin Requirement

When you write options the margin required varies based on the underlying, volatility, expiry and more. Until now there was no other online tool that could tell you the margins required before taking a trade, very important for an active option trader.

The example below shows the margin required for shorting 1 lot of Nifty 6000 Dec Calls. Do note that you need to click on Sell after entering the net quantity if you want to see the option writing margin requirement.

Total Margin = SPAN + Exposure

Total Margin is the margin required to hold the position overnight also called NRML margin at Zerodha. If you use the product type as MIS instead of NRML while placing an order you will get additional leverage only for intraday trades. Read our Margin Policy for more.

 Premium Receivable?

When you write/short options the premium that you receive gets credited to your trading account immediately after taking a trade. Zerodha SPAN calculates this premium received based on closing price of premium from the previous day.

So in the example below, the margin required to write/short 1 lot of Nifty 6000 calls is Rs 31,625, but as soon as you take this position Rs 13,370 is credited to your trading account effectively blocking only around Rs 18,300 for this position. It works the same way for both equity and currency options.

Zerodha SPAN for option Writing/Shorting margins

 

For Multi-Leg F&O Strategies Margin Requirement

There are many popular multi-leg f&o strategies like Straddles, Strangles, Iron Condors, Butterfly, Bull Call Spreads, Covered Calls, and more which would involve taking more than 2 positions at a time.  The margin required for such a combined position could be less than sum of individual margin requirements if the positions hedge each other, like in the calendar spread example above.

Knowing the margin requirement upfront for such a position is very important to better plan the trade. NSE sells a very complex software called PCSPAN which can be used to calculate this, but we have simplified this  for you on Zerodha SPAN and for completely free. See the example below for calculating the margin requirement for an Iron Condor Strategy on Nifty

Iron Condor involves 4 legs  and is a limited risk non-directional option strategy designed for high probability of earning a small profit when you perceive low volatility.

Nifty is presently at 6100

  • Sell 1 OTM Put – Short 1 lot of 6000 PE in the example
  • Buy 1 OTM Put (Lower Strike) – Buy 1 lot of 5900 PE
  • Sell 1 OTM Call – Short 1 lot 6200 CE
  • Buy 1 OTM Call (Higher Strike) – Buy 1 lot 6300 CE

As you can see below the Zerodha SPAN will show the margin required and the benefit for entering this strategy in a jiffy.

Total Margin = SPAN + Exposure – Spread Benefit (If any)

Total Margin is the margin required to hold the position overnight also called NRML margin at Zerodha. If you use the product type as MIS instead of NRML while placing an order you will get additional leverage only for intraday trades. Read our Margin Policy for more.

Zerodha SPAN for Multi-Leg F&O Strategy Margins

 

Disclaimer: Zerodha Margin Policy can change any point of time based on risk and market volatility.

 

Hoping all of you like this tool,

Happy Trading,

 

avatar

Nithin Kamath

Founder & CEO @ Zerodha, team working towards breaking all barriers that I personally faced as a retail trader for over a decade. Love playing poker, basketball, and guitar. Getting body fat % in single digit is the next personal endeavor :) .

  • avatar
    Jake the Snake

    Very Nice.. Thanks for this…

    Reply

  • avatar
    harish

    Not many brokers out there who think like u guys..

    Reply

  • avatar
    Priyanka

    Are these margins applicable only for those who have opted for zerodha trader or also for those who use nse now?

    Reply

    • avatar
      Nithin Kamath Post author

      It is for Zerodha Trader, for NOW there would be a small variance.

      Reply

  • avatar
    suresh

    thanks for the above information and the examples are really good.
    I just want to know when will you introduce cover orders in commodity.

    thanks,
    suresh.

    Reply

    • avatar
      Nithin Kamath Post author

      Cover orders are still not approved by MCX, we are pushing for it though.

      Reply

  • avatar
    chittadash

    when will ur new software lunch

    Reply

    • avatar
      Nithin Kamath Post author

      We are working on it, might take 2 to 3 months more.

      Reply

      • avatar
        rajesh

        new software still not launchef.

        Reply

  • avatar
    Rajendra Prasad

    Any updates on the latest software which u promised to be released by end of this year?

    Reply

  • avatar
    Raj

    In ICICIDIRECT there is something called Margin Buy and Margin Sell. Does ZERODHA has similar service available for the customer ?

    Reply

    • avatar
      Hanan

      Zerodha has something better. We have two extra leverage margin order types:
      1. MIS – Margin Intraday Squareoff – You get 3 to 10 times exposure for intraday trading.
      2. CO – Cover Order – More information is available in this article.
      Check this out!

      Reply

  • avatar
    Priyanka

    Is it possible to enter one order that cancels other if executed.
    For example I am long Nifty future at 6000 and want to place an order at 5950 as my stop loss. This is fine and does not involve any additional margin
    But I also want to book profit if it moves to say 6100. If I enter another order for selling at 6100 it requires additional margin.
    Is there any way to do this?

    Rgds
    Priyanka

    Reply

    • avatar
      Nithin Kamath Post author

      Priyanka,

      Check this blog on margin required for 2 exit orders for 1 position.

      If you are trading futures, you can place both SL and target order without requiring additional margin. But if one gets executed the other won’t get cancelled automatically, you will have to manually cancel the other order.

      Cheers,

      Reply

      • avatar
        AKASH

        sir
        there is one problem in your software when we are calculating the cds margin the quantity is remain fixed to 1000 if we want to put 100 or 2000 it automatically taking 1000 quantity

        Reply

        • avatar
          Nithin Kamath Post author

          Thanks Akash for pointing, we will have this fixed.

          Reply

          • avatar
            Nithin Kamath Post author

            This is done.

            Reply

            • avatar
              AKASH

              THANKS A LOT SIR…..THANK YOU VERY MUCH NITIN JI

              Reply

  • avatar
    Suresh

    Thanks for providing the online span calculator

    Reply

  • avatar
    Ram Mohan

    Nice article. As per the above to take all (both 2 long + 2 short) postions need only 39064 ? or it is only for shorted positions? Do we need pay separately for buying positions?

    Reply

    • avatar
      Nithin Kamath Post author

      Yes, it is for shorted positions. Buy options will be separate, as they are not categorized as margins.

      Reply

  • avatar
    Mayuresh Kemkar

    Dear Sir,
    This is my first query post on the blog, I do not know whether this is right place to post or not , as i have seen Mr. Kamat sir explaining to lot of fellow traders , So I hope that I will get chance to interact with Mr .Nitin Kamath sir …

    Please, explain following situation with figures…

    Considering I have Rs 30,000/- in my account,

    1) Amount of margin that gets blocked to enter long call GBP futures JAN Contract with 5 lots

    I can see ( Rs 13,892 ) on span calculator.

    So Rs 13,892/- Will be the margin required for this position ..

    A live market entry is done.. now,

    Account status of 30,000/- will show 13,892 as blocked margin and 30,000 -13,892 = 16,108 INR As available limit.

    Is this correct?

    If yes, then the next part of the question –

    2) Now, I enter a second position with following details ..

    Short call GBP futures with 5 lots at the same time on GBP FEB contract – (13,752) Margin as per span calculator,

    BUT , as this now is a SPREAD position, span calculator calculates the benefits and shows:-

    SPAN margin
    Rs: 7,568
    Exposure margin
    Rs: 5,110
    Total margin ?
    Rs: 8,422

    Now, as you can see, the calculator is showing lot of “SPREAD BENEFIT”

    So my question is With above two above positions running,

    At which of the following margin value, Zerodha will Automatically cut (square off ) both positions if the margin gets touched

    A) When 30,000/- account comes down and touches Rs 13,892 — This was the FIRST call’s margin requirement

    OR

    B) When 30000/- comes down to Rs 8,422 which is the margin showed by span calculator as BENEFIT because of spread position.

    OR
    C) If both above are wrong, what is the required margin which MUST always be present so that the position does not get squared off because of touch to margin..

    D) Is it applicable for overnight positions?

    Dear sir I would like to request you to answer in exact figures (This makes lot of difference to my trading )

    Thanks :)

    Reply

    • avatar
      Nithin Kamath Post author

      Hey Mayuresh,

      1. Yes, out of 30,000, 13892 gets blocked for your long GBP position and the rest which is 13752 is free balance.

      2. You have forgotten to mention which strike price of GBP Calls feb contract you are shorting, But anyways:

      If we let you a hold a position overnight, with money lesser than the SPAN requirement (7568 in your example), the exchange penalizes you for this. Our RMS team would typically square this position off atleast 30 to 40% above this minimum margin requirement (there is no set rule for this, it depends on market volatility). So if SPAN required is 7568, around Rs 11000(when your account balance comes down from 30000 to 11000) is probably when our RMS team will start reducing your position. But that said, we understand such completely hedged positions, and are pretty lenient with it.

      Yes the margins applicable are for overnight positions.

      Hope this helps,

      Cheers,

      Reply

      • avatar
        Mayuresh Kemkar

        Thank you so much sir your answer clears lot of my queries … I have complete confidence on Zerodha .. its is the
        best !!
        as per your suggestion I have mentioned long and short strike prizes for either of the contracts executed at the same time.
        GBP long 5 lots Jan 100.07
        GBP Short 5 lots DEC 100.10

        also ,Sir as I am new to this field , Sry to bother you with the same point once again.. continuing for above condition overnight position how much amount gets blocked as margin blocked ?
        1. 7,568 (SPAN)
        2. 13,752 (Second call’s margin)
        3. 8,422 (Total margin)
        4. 13,892 (First Call’s margin)
        5. 13892+13752 (1st +2nd Call’s margin)

        Thanks

        Reply

        • avatar
          Nithin Kamath Post author

          My bad Mayuresh, when you had mentioned Short call GBP futures, I thought you were referring to call options, and hence asked you for the strike price. Options trading is allowed only on USDINR in currency.

          Coming back to your query, when you take such a position, buy 1 month future, and sell another, it is called a Calendar spread. Such a position is completely hedged, and hence has hardly any risk.

          The Total margin (8422), is what will be blocked in your trading account.

          Cheers,

          Reply

  • avatar
    Mayuresh Kemkar

    Thank you so much sir… :)

    Reply

  • avatar
    Sachin

    Hi Nithin, Many of the features of Nest Trader (PC) are not available on Mobile (Android). Is there any upgrade planned?

    Reply

  • avatar
    Waman

    Hi,
    The SPAN Calculator is indeed an excellent tool, thanks for that.
    I have a doubt while shorting the options. As you mentioned in the example, while shorting the option effectively only 18300 gets blocked, so can we short an option with just 18300 in our account or do we need the whole amount 31625 first and then after position is taken, we are refunded?
    Also, if we short the option using MIS, how much of the total margin amount is premium receivable?

    Reply

    • avatar
      Nithin Kamath Post author

      Hi Waman, You would need the 31625 to take the trade, but once you take the trade the premium gets credited to your trading account, effectively blocking only around 18k. If you use MIS, it will be 40% of that amount, the premium received will still be the same, but the positions will get squared off at 3.20pm.

      Reply

  • avatar
    Sai Kiran

    Hi Nithin,
    Could you explain(the rationality) why the margin is higher than maximum possible loss on hedged position for the below example. I think in US markets, the margin charged on hedged positions is equal to the maximum possible loss.

    Example: 6300/6400 Bear Vertical Call Spread: Sell 6300 Jan Call at 132, and Buy 6400 Jan Call at 78, for a credit of (132-78) 54 points. The maximum possible loss should be the difference between the strikes (6400-6300=100), which is 5000/- per lot, and after adjusting for the credit received, (100-54=46 points loss) maximum loss should be 2300.

    In-spite of the above, the actual total margin charged is 21,466 comprising of (Span margin: 9,550 Exposure Margin: 9,456 and Premium receivable: 2,460

    Reply

  • avatar
    Peter

    I didn’t understand leverage let me take example : current nifty strike is 6340, I have just Rs.500/- in my account, current LTP of 6400 CE is Rs.20 since I don’t have Rs.1000/- I am unable to buy CE with NRML, I selected MIS but still not able to buy (error : RMS exceeds ….) why ? can you explain how much I should have minimum balance in my account for this example ?

    Reply

    • avatar
      Hanan

      Peter, we do not give you any leverage on buying options. Options are very complex financial instruments and giving leverage on the buy side could put you and the broker in jeopardy.

      Intraday margins are provided only for EQ, Futures, and Commodities. We also provide intraday margins for Option writing as per the futures margins.

      Reply

      • avatar
        Peter

        Thanks Hanan, I wasn’t knowing about it. in SPAN calculator http://zerodha.com/margin-calculator/SPAN/ under the main category “Product” there is subcategory “options” 2nd one, so I confused. Is it application bug then ?

        Reply

        • avatar
          Nithin Kamath Post author

          It is not a buy, the reason we show buy options there is because, for example if you buy futures and buy put options, the margin for futures reduces since the risk is hedged. That is why we give an option for you to add buy option position in SPAN calculator.

          Reply

          • avatar
            Peter

            Thank you..Nithin please upgrade trading module… because back office login requires IE, you might aware Linux distributions doesn’t come with IE … please make something common which works with all browsers… and Zconnect app is very poor I must say… strike rates are not getting updated on Z5 regularly… I read many issues like min max are not getting updated in script something like that on google.. Zerodha is 95% good in all aspects in India but this remaining 5% application related issue need to be solved.

            Reply

            • avatar
              Nithin Kamath Post author

              New BO coming up very soon you should be pleasantly surprised, new trading application also will be up soon.

              Reply

  • avatar
    NagabhushanS

    Hello Nithin,

    I am trying to learn the Margin trading on *NIFTY options* and have experience in NRML trading. I tried exploring Span calculator but the page was not properly displaying eventhough i tried refreshing several times and it did not work on IE and chrome browsers. the issue was that the script dropdown list was not populated with details irrespective of what i select in Exchange and Product. Is there any issue now (29 Jan 2014).

    My another question is: To know the Margin amount for Margin trading on Nifty options, I logged into Backoffice and downloaded the “Margin Details and Position Limits” is this the right file to learn about today’s Margin leverages?

    in that file I read the rows but could not understand certain technical terminologies, could you please help me to understand those, the details are here below

    with Rs. 10,0000 how much Margin can I leverage to buy nifty Feb series 6000 option?

    Sl no 296
    Script Name NIFTY
    Expiry 30/01/2014
    Rate 6139.40
    Lot Size 50
    SPAN * Margin % 5.00
    SPAN Amount(A) 15352.00 ——— what does this detail mean?
    Exposure Margin% 3.00
    Exposure Mrgn Amt(B) 9209.10—– what does this detail mean?
    Total % 8.0
    Total Amount 24561.10 —————– what does this detail mean?
    Spread Margin N Month 1.03
    Position Limit Client-wise 22475445 — what does this detail mean?
    STOCK FUTURE Limit TM/FII’s-wise –
    OVER ALL Limit TM/FII’s-wise –
    Position Limit Market Wide –
    PDEOD Open-Int Qty –
    PDEOD Open-Int % -

    Reply

    • avatar
      NagabhushanS

      Correction from my side after reading Hanan’s comment above : “Peter, we do not give you any leverage on buying options. Options are very complex financial instruments and giving leverage on the buy side could put you and the broker in jeopardy.”

      with Rs. 10,0000 how much Margin can I leverage to buy nifty Feb series 6000 Futures? and where can I get the details as http://zerodha.com/margin-calculator/SPAN/ is not updating the script list.

      Thanks,

      Reply

      • avatar
        Nithin Kamath Post author

        Nagabushan,

        There is some glitch on the calculator, we just spotted this after you pointing out. We will have this fixed at the earliest. For knowing how much margin required for FEB futures, you can either use the SPAN calculator or the futures margin calculator. Give it a little time, it should start working, our techies are at work.

        Reply

        • avatar
          AKASH

          nitin sir
          i have one problem in currency segment.
          in currency segment a new contract launch that is INTREST RATE FUTURE BOND there is no option to calculate the BOND margin so can you please give an option in cds segment to calculate the BOND margin.

          Reply

      • avatar
        Nithin Kamath Post author

        Nagbushan,

        The tool is up..

        Cheers,

        Reply

        • avatar
          NS

          Thanks Nithin for fast response and looking into the issue.. cheers

          Reply

  • avatar
    amit sahoo

    hi nithin,

    your span calculator is not working properly….

    could you say how much margin required to

    1) sell nifty call 6100 @ 109 feb series
    2) sell nifty put 6100 @ 100 feb series

    kindly help me in detail ….. margin required for day trading & overnight

    Reply

    • avatar
      Nithin Kamath Post author

      Amit,

      It seems to be working alright, Choose NFO, options, Symbol as Nifty Feb, Option type as calls or puts, mention the strike as 6100, Net quantity as 50, tick on the sell option, and click add..

      1. Margin for shorting 6100 calls: 23687
      2. Margin for shorting 6100 puts: 23492

      if you take both positions together, you don’t get any margin benefit as such.

      Reply

  • avatar
    MohanReddy

    sir i entered my strategy in span margin calculator then it shows

    span margin
    68000
    expousure margin
    82000
    total margin
    980000
    margin benefit 1,13,240

    then it seems how much cash i need for hold this strategy for delivery for 15 days…

    Reply

    • avatar
      Nithin Kamath Post author

      Total margin is the cash that is required for holding this strategy

      Reply

  • avatar
    swapnil

    Dear Nitin,
    SPAN Calculator is not working. It’s not showing any output when we entered all inputs.
    Please look into. No doubt It is very important and useful tool

    Reply

    • avatar
      Nithin Kamath Post author

      Swapnil, Which browser are you using, it seems to be working fine on mine, can you shoot an email to nithin@zerodha.com with your contact, will get someone to call back and check your browser.

      Reply

  • avatar
    coolblr

    It would be great if the SPAN page for options is made something like this; http://nseindia.com/live_market/dynaContent/live_watch/option_chain/optionKeys.jsp?symbolCode=-10006&symbol=NIFTY&symbol=NIFTY&instrument=-&date=-&segmentLink=17&symbolCount=2&segmentLink=17 So one could add the strategy, just by clicking on the contract they want to trade (Buy/Sell) and just add the quantity, if its multi-leg. Eventually for options if you could add the payout graph for the strategy chosen that will be amazing :)

    PS. There is a check which says – you are posting too quickly, SLOW DOWN. LOL

    Reply

    • avatar
      Nithin Kamath Post author

      :) , We are presently all working on our new trading platform “Evo”, what you say requires some effort, it is already on my list of things to do. :)

      Cheers,

      Reply

  • avatar
    coolblr

    That is cool. Do you have a working version of Beta?!

    Reply

  • avatar
    Pugazh

    Can I use my existing stocks (Purchased for long term) as collateral for margin requirements? How do I do it? Please explain

    Reply

    • avatar
      Nithin Kamath Post author

      Yes you can, shoot an email to india@zerodha.com and siva@zerodha.com, requesting to pledge your stock as collateral. As soon as you do it, the margin after haircut will be released to your trading account. Note that you will be still required to maintain 10% of the margin required for futures as cash, for any probably MTM losses. So as an example, if you give Rs 1lk worth of stock as collateral which has haircut of 20%, Rs 80,000 will be available in your trading account. If you wish to now trade 2 lots of nifty futures which require margin of around Rs 50,000, you can use Rs 45000 from the collateral, but you will need to have Rs 5000 (10%) as cash in your trading account.

      Hopefully this clarifies.

      Cheers,

      Reply

  • avatar
    anand

    Span calculator not working for the past 2 days?

    Reply

    • avatar
      Nithin Kamath Post author

      Anand it is working fine on google chrome, some issue with firefox, and internet explorer. Checking this out.

      Reply

  • avatar
    Muthu

    what is– total transaction charges in each trade and why it is more for F & O option ( compared to other in your brokerage calculator when the turnover is much less )

    Reply

    • avatar
      Nithin Kamath Post author

      Muthu, in futures and options, your turnover is not the margin turnover but your entire contract turnover. So for example, if you buy and sell 1 lot of future with a margin of Rs 25000, the margin turnover is Rs 50,000, but the contract turnover is Rs 6lks +. Total Transaction charges include exchange charges and clearing charges.

      Reply

  • avatar
    Muthu

    Hi Mr.Nitin,
    Thank you for the reply. This is with reference to your brokerage calculator. For equity – both delivery and intraday, F&O – Future where the turnover is Rs.8,40,000, the total transaction charge is Rs.32.76 whereas for F&O – options, for a turnover of just Rs.84,000 the transaction charge is Rs.66.36. Why is the charge so high for the option segment alone ?

    Reply

    • avatar
      Nithin Kamath Post author

      For options, the transaction charge is on premium turnover, whereas on futures and equity it is on the total turnover. For example when you would have done a turnover of Rs 84000 in options, it could mean for example buy and sell of 20 lots of Nifty options trading at Rs 40. Whereas a turnover of 8.4lks on futures is equal to less than just 2 lots of futures. For futures it is 0.0039% of contract turnover and for options it is 0.079% of premium turnover.

      Reply

  • avatar
    Sibi Chakravarthy

    I cant trade during live markets….so i usually preset my orders using amo….today also i had placed my order fr buying reliance power at 62.3 in MIS mode ….but my order got rejected…and the rejection reason was “16418:order with invalid attributes rejected by system”…where could the problem possibly be? I am sure i have placed orders at similar prices, quantity earlier with no issue…please do the needful…

    Reply

    • avatar
      Nithin Kamath Post author

      Sibi,

      We have put a restriction on order size for AMO orders, what is the size of each of the orders you are placing?

      Reply

  • avatar
    Manish Keshruwala

    The margin calculator does not have all the contracts for Commodities. Lead, Zinc, Gold Petal, etc are missing. Pls look into the issue

    Reply

  • avatar
    Nitesh sharma

    hi nithin want to know the margin for natural gas not able to see the same in span calculator

    Reply

    • avatar
      Nithin Kamath Post author

      Nitesh check here

      Reply

      • avatar
        Nitesh sharma

        HI Nithin Thanks for the Reply But How much will be the Amount for A hedge in NG for FEB & March

        Reply

        • avatar
          Nithin Kamath Post author

          For the Calendar spread between Feb and March, margin required is around 73110

          Reply

  • avatar
    sibi

    hi nithin,
    i usually place a quantity of 2500…and this time too i placed the same quantity….may i kno why this new restriction on amo is for? also please suggest alternatives to carry out my order of above given specifications…

    Reply

    • avatar
      Nithin Kamath Post author

      Sibi sorry for the previous reply, yesterday there was an issue from the exchange end, and all AMO orders with SL-M had gotten rejected. That quantity restriction we have placed on a bunch of clients, who have been placing 100’s of dummy AMO orders. There is no such restriction on your account, you can try placing it again tomorrow.

      Cheers,

      Reply

  • avatar
    renjithppaul

    is it possible for a customer having a Trading account for both commodity & Equity,FNO , to transfer his funds from one segment to another, than taking payout and making Payin.

    Reply

    • avatar
      Nithin Kamath Post author

      No Renjith, this is not allowed by the exchanges and the regulators. Funds in equity can be used for equity, FNO and currency, and funds in commodity has to be kept separately, and funds can’t be transferred between them. Only way is to take a payout and then payin

      Reply

  • avatar
    RVKr

    What’s span margin % rate for shorting option, In span calculator looks like it’s low campare to future span margin and exposure’s almost same

    Reply

    • avatar
      Nithin Kamath Post author

      RV,

      The SPAN margin % varies for every option strike, there is no fixed rule, and that is one of the reasons for putting up a calculator that lets you find out option writing margin requirements.

      Reply

  • avatar
    RVKr

    That’s ok ,but calculator showing total margin which includes receivable premium,Q1- Is total showing margin required for completing short transaction or Q2- Only span+exposure margin required for transaction ?

    Reply

    • avatar
      Nithin Kamath Post author

      How option writing works is that to write an option you need the SPAN + Exposure, once you have written the option the premium is credited to your account (premium receivable). So in net effect margin blocked after taking a position will be SPAN+Expo – Premium receivable.

      Reply

      • avatar
        RVKr

        Thanks ,Now It’s clear

        Reply

  • avatar
    Kaushal Mehta

    Hi,
    I am not getting margin details for MCX contracts.

    Reply

    • avatar
      Nithin Kamath Post author

      Kaushal,

      Having this checked,

      Reply

    • avatar
      Nithin Kamath Post author

      Working now

      Reply

      • avatar
        SWAPNIL

        Dear Nitin,

        Suppose Feb option series is going on and I want to write an option having expiry in the March series.
        If I am the first person writing a specific contract example SBI call option of strike price 1650 with the expiry of March. Then who all will decide the premium I will collect for writing this option.

        Reply

        • avatar
          Nithin Kamath Post author

          If you are the first person to write/sell it, you can decide the price at which you want to sell, if someone buys it from you that is the first price. If you put a price and no one buys, you will probably have to then modify the price lower, until someone buys. That is how price discovery works.

          Reply

      • avatar
        Kaushal Mehta

        Thank you so much.

        Reply

  • avatar
    Gyan

    Dear Nithin
    I am using NSE now software, so I understand that margin requirement calculate by SPAN calculator won’t be 100% right. My account id 13906-*****. I put my open position(as of 9th March 2014) in SPAN calculator and it showed me below details
    SPAN margin = INR 478111, Exposure margin = 219145, margin benefit = INR 15000
    But then I looked at my account balance in backoffice,
    SPAN Margin Debit. ******* 352354.750
    Exposure Margin Debit. ****** 218694.100

    Why SPAN margin is very different?

    I have one more query which is regarding “F&O Obligation Amount” in Account balance sheet of backoffice.
    it is showing
    07/03/2014 F&O Obligation Amount Credit 4286.960
    But when I checked Profit & Loss report for 7th March 2014, it shows completely different picture( around profit of INR 15000).?

    Rgds
    Gyan

    Reply

    • avatar
      Nithin Kamath Post author

      Gyan,

      I guess someone has already replied you an answer to this. It is best not to put up your client ID, so am deleting it from your query.

      Cheers,

      Reply

  • avatar
    patel

    Respected sir i have a little question in span margin

    if current market nifty is @ 6500
    if i sell call @ 6400 & sell put @ 6600 and i buy call @ 6500 and buy put @ 6500 when i enter in your span margin i get some amount in TOTAL MARGIN row, all are including in TOTAL MARGIN or i have to pay PREMIUM FOR CALL & PUT BUY EXTRA, i mean for this four postion i have only invest TOTAL MARGIN row in span calucator or (TOTAL MARGIN + CALL & PUT BUYSIDE PREMIUM)

    Reply

    • avatar
      Nithin Kamath Post author

      Patel,

      The SPAN shows the margin required, the premium required to buy options will be separate, so yeah Total Margin + Premium to buy the options.

      Reply

      • avatar
        patel

        Respected sir i have enter my date in zerodha span calculator i have get result as under

        STRIKE QTY SPAN EXPOSE TOTAL
        6400 C 50 S 9800 9853 30431
        6600 P 50 S 9800 9854 26264
        6500 C 50 B -2715
        6500 P 50 B -1069
        TOTAL 52910

        COMBINE MARING REQUIREMENT BOX
        SPAN MARGIN 19600
        EXPOSE MARGIN 19712
        PREMIUM RECEIVABLE 5483
        TOTAL MARGIN 44795
        MARGIN BENEFIT 8115

        My question is that i have requirement fund only Rs.44795/- for above four position or i have to pay extra amount as a premium for 6500 c & p buy, please guide me, thanks

        Reply

        • avatar
          Nithin Kamath Post author

          Patel,

          You will need 44795 + 2715 + 1069 (your buy premium values)

          Reply

          • avatar
            patel

            sir i have to only need 44795 + 2715 + 1069 = 48579 for first trade when i sell 6400 c sell how much margin required? and then sell 6600 p sell how much margin require? 6600 p margin depend upon previous position, and after i buy call & put of 6500, i have to pay first fully premium or depend upon previous postion…………. according to me sir if in my account on rs. 48579/- can i put up this four postion or i have to more amount for trade step by step and after credit margin in my account and margin block Rs.48579/- only, if exchange want more amount up to execute order there is no meaning for less margin Rs.48579/- if i have to credit 60000 or 70000 or more for trade up to excute order?

            other question is that spread order for future only when i sell & buy different month, i can buy or sell in spread order but i want to only one side position for squre off, is it possible? if yes, after pending position how much margin i have to block or pay

            Reply

            • avatar
              Nithin Kamath Post author

              Patel,

              Margin required to set this up will not be more than 48759, you can use the SPAN calculator to see how much is required to first sell 6400 CE and then check for 6600 PE. You will get to know the individual margins required.
              No not possible for your second query.

              Reply

  • avatar
    Shivam

    Hi Nithin,

    I came across this website only recently, and it is really impressive the work you guys are doing. Please keep up the good work.

    I am not sure if this is the right place to ask this, but I have a question about margin calculations.

    If I buy an at-the-money NIFTY put and a NIFTY future, both with same expiry, say April 2014. I then sell an ATM NIFTY call with same expiry. I am essentially trying to setup a put-call-futures parity condition, which is a hedged position. I expect the margin for such a position to be significantly low, but when I calculate the same using the SPAN calculator, I get the total margin for this position as Rs. 31,592 (for strike price of 6700). Can you please explain why the margin should be so high even for such a hedged position?

    Thanks in advance.
    -Shivam

    Reply

  • avatar
    Kalyan

    When i try to calculate the exposure required to buy an in the money option eg. 6900 PE, it is showing a negative amount, is there something wrong with the tool

    Reply

    • avatar
      Nithin Kamath Post author

      When you buy an option, there is no SPAN margin, disregard if it is showing negative, we will have it fixed today.

      Cheers,

      Reply

  • avatar
    raoshahb

    if span calculator is showing the following data then how much money should be there in my account to hold this position for overnight …

    SPAN margin Rs: 3,411
    Exposure margin Rs: 19,373
    Spread benefit ? Rs: 16,150
    Total margin ? Rs: 6,635

    Can i hold this position if I have only 11k left in my account.

    Reply

    • avatar
      raoshahb

      i mean how much money is required to take this position initially..

      Reply

    • avatar
      Nithin Kamath Post author

      Total margin is the money required for holding this position, which in your case shows 6.6k, so yes you can hold this position with 11k in your account. But the challenge would be entering this position, as the spread benefit will come into play only once the position is taken. So while entering individual positions, you might be asked for higher margin, but once both the position is taken, margin required drops because they would be hedging each other.

      Cheers,

      Reply

  • avatar
    Bushan

    In the SPAN calculator, i have entered sell 6900 PE MAY 150 units and the margin requirements are :
    SPAN Margin – 52,305
    Exposure Margin – 32,004
    Premium receivable – 20,005
    Total Margin – 84,309.

    MY question is:
    1. When i enter the contract (i.e. short NIFTY 6900 150 units), in my trading account I should have Rs.84,309/- or 84,309 minus 20,005 (premium receivable) = Rs.64,304/- to successfully complete the transaction?

    2. IF the above answer is Rs.84,309/- then how much money I will be left or blocked for trading after completing the above transaction?

    3. Finally, if the above transaction is MIS then how much of margin will be required to execute the trade?

    Reply

    • avatar
      Nithin Kamath Post author

      1. You need 84309
      2. Once you take the position, the premium receivable is credited to your account, so your account balance will start showing 104314, but margin blocked will be 84309
      3. If it is MIS, you will need 40% of this 84309, but the premium is credited on T+1 day, so you won’t get the benefit of the premium credited for the same day.

      Reply

  • avatar
    Bushan

    Thanks.
    SPAN calculator shows the premium amount for yesterday’s closing price. However, in reality, the premium credited will be based on the price at the time of entering into a contract correct?

    Reply

  • avatar
    Shobha

    Hi ,
    If I write in deep Out of Money Options, margin requirement is huge. unlike for In the Money option
    Say, NIFTY Spot at 7000.
    Days to Expiry = 10

    I Sell PUT 1 Lot of Strike Price 6500 at 10Rs premium each. Margin is ~22,000 – 500 = Rs.21,500

    Now Lets say I make another trade,
    I Sell CALL 1 Lot of Strike Price 7500 at 10Rs premium each.It needs additional Margin of Rs. 21,500

    Making total margin of 43,000 for trades. Its getting simple summed up. Shouldn’t it take into account that Targets are pretty far and account for days left and Volatility.

    There should be some facility for margins of deep out of money trades.

    Reply

  • avatar
    Manish

    hi

    Hi
    i am one of the Zerodha user and want to know that
    1. How the contract value in options are matched on expiry ?
    2. Is it matched with the rate quoted by the buyers?
    pls explain with example.
    Thanks

    Reply

    • avatar
      Nithin Kamath Post author

      All options on expiry is settled based on the underlying price. So for example if you have Nifty 7400 calls and you don’t sell and if Nifty the underlying closes at 7410, your calls are settled at Rs 10 and not what is quoted by buyers.

      Reply

  • avatar
    Sukesh

    Hello,

    I was trying to calculate the margin requirements using the below link of Zerodha:

    https://zerodha.com/margin-calculator/SPAN

    Either i am missing something or there is an issue with the system – i am not able to add multiple positions and see the span requirements for them.

    Each time i add a new position, instead of adding it to the position i had earlier selected, it is replacing the previous position i had entered.

    Is there something wrong in what i am doing? Also i dont see a calculate button which i can use to show the combined margin blocked for all my positions once i have entered their details.

    Reply

    • avatar
      Nithin Kamath Post author

      Sukesh, seems to be working fine, which browser are you using? try using the chrome or firefox and see. When you add it automatically calculates, so there is no calculate button.

      Reply

  • avatar
    ns

    Can i use futures as covered position too sell calls?

    Reply

    • avatar
      Nithin Kamath Post author

      Yes you can and your margin requirement is lower because your positions are hedged. Add values on the SPAN to check how much it gets lowered.

      Reply

      • avatar
        ns

        Thanks Nithin!

        Reply

        • avatar
          ns

          Would that be zero margin to sell call on the future posotion?

          Reply

          • avatar
            Nithin Kamath Post author

            No NS, you get a margin benefit for taking a hedged position, but the benefit is not to that extend. Add the contracts yourself and see..

            Reply

  • avatar
    Googol

    Seems there is some problem.. Its showing N/A when i added a 140 put of IDFC along with IDFC future.. and ZT 3.11.2 dont hav span calculator ryte ??

    Reply

    • avatar
      Googol

      its working fine now.. it wasnt working after market hours !

      Reply

  • avatar
    MohanReddy

    Sir how can we use NSE amount for MCX orders…. is there any optiion

    Reply

    • avatar
      Nithin Kamath Post author

      No Mohan, we are legally not allowed to let you trade on MCX using funds in equity or vice a versa.

      Reply

  • avatar
    Projjwal

    Hi Nithin,
    For Calendar Spreads, what your span tool is showing, i can get a handsome amount of margin benefit in case of future and that helps keep the margin required low.

    But for option, it is not the same case. There is no such spread benefit (like future) in case of option which is eventually let the required margin low and margin benefit high.

    Can you please clarify this why this is the case for option?

    Reply

    • avatar
      Nithin Kamath Post author

      The payoff for long and short futures are completely opposite so the risk is completely covered, but it is not the same for long and short options. Since the risk is not completely hedged, the margin required is more than calendar spreads for futures.

      Reply

  • avatar
    Mohsin

    Do we have to pay any interest on the margin amount on future trading if I hold the stock the till the expiry date.

    Reply

    • avatar
      Nithin Kamath Post author

      No Mohsin, futures have inherent margin and hence you don’t need to pay any interest even if you hold it till expiry date.

      Reply

  • avatar
    Poovhen

    Please update the SPAN calculator for margin calculation of those index contracts whose option buying has been recently enabled. Thanks!

    Reply

    • avatar
      Nithin Kamath Post author

      For option buying leverage, you need to use bracket/cover orders and hence need to use the BO&CO calculator. This is already updated.

      Reply

      • avatar
        Poovhen

        My bad! Thanks for the clarification.

        Reply

  • avatar
    Salesh Bhardwaj

    hello
    if we sell 10 lot of nifty option like 4 lot 7700 call 4 lot of 7300 put , a lot of 7500 call and 1 lot of 7500 put
    and buy 8 lot of nifty option like 4 lot of 7300 call, 4 lot of 7700 put
    and trade in 2 lot of each in nifty & bank nifty future.
    how much fund required for all of this

    Reply

  • avatar
    Ravi Kiran

    Dear Nithin,

    Launch ‘PI’ at the earliest possible time, waiting for it :)

    Reply

  • avatar
    Bushan

    Hi,
    Why can’t the SPAN calculator use the current market price instead of yesterday’s closing price for calculating the margins required for writing a contract?

    Reply

    • avatar
      Nithin Kamath Post author

      The way it is designed presently, it can’t take live market quotes, it is on our list of things to do.

      Reply

  • avatar
    vishal

    how much margin for BFO BSX ??? intra and positional and where to check it ?

    Reply

    • avatar
      Nithin Kamath Post author

      Vishal, we are still not getting the files for margin requirements, but it is around 10% of the contract, the lotsize is 15

      Reply

  • avatar
    ram

    SPAN calculato is not working after market hours? I am using Google chrome browser.

    Reply

  • avatar
    chandavar nanjappa krishnamurthy

    what is the procedure for writing covered calls. for ex. if I have 250 RIL shares in my account and if I want to write a call for Rs 1100, what will be be the margin ?

    Reply

    • avatar
      Nithin Kamath Post author

      You will have to first pledge your shares by sending an email request to support@zerodha.com. Once the stock is pledged you will get a margin of around 70% of your pledged stocks, which can be used to write Reliance calls.

      Reply

  • avatar
    kiran

    Hi ,
    Is margin available on selected stocks of equity or all the stocks in NSE ?

    Reply

  • avatar
    vinayak

    I’m not sure this is a SPAN calculator related question, possibly a more fundamental question:

    I tried to calculate the margin requirements for buying one lot (50) of NIFTY along with a purchase of one lot of Put Options (priced 8300, Nifty is below 8000 right now); both expiring OCT. The overall position has no net downside risk (any downside in Futures covered fully with the PE options which by themselves are risk-free) Upside “risk” is my potential payoff (rather than the exchange’s)

    Yet the SPAN calculator calculates a pretty large margin requirement for BOTH exposure margin and SPAN (again, there is no statistical risk)

    Can somebody explain to me why is that? Is there something wrong in my assumptions?

    Reply

    • avatar
      Nithin Kamath Post author

      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.

      Reply

  • avatar
    DN0947

    Hi,
    In your Span calculator @ https://zerodha.com/margin-calculator/SPAN/, not all commodities are listed under MCX. When I go to https://zerodha.com/margin-calculator/Commodity/ page, all items are mentioned but I cannot create a bouquet of commodities and calculate the margin requirements in one shot.
    Can you help? I need to find out the collective margin of all my commodities.
    Thanks.

    Reply

    • avatar
      Nithin Kamath Post author

      We will add all commodities on the SPAN calculator soon. Do check it out after 2 days.

      Reply

  • avatar
    DN0947

    Hi,

    I want to know why there are 2 additional checks in your system for logging in? I need to click on my Avatar picture and answer 2 extra questions.

    Customer support says it is because of SEBI requirements. Can you point me to SEBI website because you are the only one which is following SEBI’s guidelines religiously, if that is the case?

    Your log in process is annoying & take more time, would request you to disable all that and make the log in as quick as possible.

    Hope you understand,

    Thanks.

    Reply

  • avatar
    DN0947

    Hi,

    Your NEST Trader software is not at all up to the mark. I am surprised how can you launch such half baked product to the users. For most of the menu links, it just says: URL not found in the ini file.

    I was told you are going to launch your own new trading software. When that would happen since I was told about that 1 month back and there is still no news regarding that on your site?

    Eagerly looking to move to a better software,

    Thanks.

    Reply

    • avatar
      Nithin Kamath Post author

      Yes, Pi will be up soon. We have over 200 testing it out already. Check this for an overview.

      Reply

  • avatar
    Manohar

    Hi Sir,

    If i want to trade in Futures margin, eg: If i want to buy Unitech 1 lot in Futures margin(buy today and sell on before Expiry) what is the amount required as am confused with Futures Intraday and Futures Margin

    Thanks in advance for your help and support

    Reply

    • avatar
      Nithin Kamath Post author

      You can either use the SPAN or use our futures margin calculator . The margin required presently for 1 lot is 100618 for overnight position. If you want to trade this for intraday, it is 40% of this, but you will need to use the product type as MIS while placing the order. Check this post.

      Reply

      • avatar
        Manohar

        Thank you Sir for your reply,

        Overnight position means till Expiry date, can i sell on or before expiry date

        Reply

        • avatar
          Nithin Kamath Post author

          Yes, you can sell on or before expiry date.

          Reply

          • avatar
            Manohar

            Hi Nithin,

            Thank you,

            could you please let me know the difference between Equity Intraday and Futures Inraday, only the Margin amount is different?

            Reply

            • avatar
              Nithin Kamath Post author

              Yeah margin amount is different, in equity there is no lot size,but in futures you have to buy/sell as multiple of lots.

              Reply

              • avatar
                Manohar

                Thank you Nithin,

                Is there two types of Trading like Equity Futures and Derivatives Future, am just confused, If i would like to traded in Futures, is that Equity or derivative?

                Reply

                • avatar
                  Nithin Kamath Post author

                  Both are one and the same Manohar. People call it equity derivatives, equity futures, futures, they all mean the same.

                  Reply

                  • avatar
                    Manohar

                    Thank you SO much, i Would like to open account with Zerodha, DO we have call and trade option

                    Reply

                  • avatar
                    Manohar

                    If i send all mandatory documents , in how many days account will be opened and when can i trade

                    Reply

                    • avatar
                      Nithin Kamath Post author

                      If all documents are in place, trading account will take 1 day and demat 7 working days. Once trading is opened, you can start F&O.

                  • avatar
                    Manohar

                    Thank you SO much for ur patience,

                    Could you also please clarify, If i buy futures under Normal with Expiry date jan 2015 and if i sell before expiry , amount will be credited on the same day when i sell or do i need to wait till the expiry date

                    2) can i sell futures partly( like one lot one time and others at different time)

                    Reply

                    • avatar
                      Nithin Kamath Post author

                      1. When you buy futures a margin is blocked, and that margin gets unblocked as soon as you exit the position, i.e immediately. The profits made on a particular day is credited on the next day, and losses are debited the same day from your account.

                      2. Yes, if you have 5 lots, you can break this up and sell as and how you wish.

  • avatar
    S JOSHI

    Thank You.
    One appreciates food best after famine.
    Similarly, Zerodha is best appreciated by someone who till date was paying >Rs 50 per option lot.

    Strategies that I hesitated to execute, fearing my trading costs are now within my reach.
    Sweet was the feeling when I earned handsomely on options (Thedifference between buy and sell price being less than the brokerage at my previous broker!).

    For me, it indeed is zero rodha.

    Regards
    A very satisfied customer.

    Reply

  • avatar
    Kailas

    I have 100000 Rs Margin benefit through pledged shares.
    I do not trade in futures. I intend to short out of the money options only.
    Do I still need to keep 10% cash in order to use the margin?

    Reply

    • avatar
      Nithin Kamath Post author

      No, we have removed the 10% cash rule now. But if there is any MTM losses, we need you to make good of it before next day. So just to be safe it is better to keep some cash just in case there is any MTM loss on your short options.

      Reply

  • avatar
    pradeep

    The span margin calculator in zerodha website doesn’t seem to work. Margins are not calculated and also when i add another leg, it just replaced the first one (at the bottom list). Dear Nithin sir, please advise.
    Pradeep Muthappa

    Reply

  • avatar
    Seetharaman M S

    SPAN MARGIN CALCULATOR NOT WORKING!!

    Reply

  • avatar
    AK Srivastava

    Span Margin Calculator is not working..

    Reply

    • avatar
      Nithin Kamath Post author

      Yes, working on getting it fixed.

      Reply

      • avatar
        Tanishq.Capital

        not working again

        Reply

  • avatar
    Ashwini

    Hi,
    I am not able to see MIS Vs NRML margin requirements. Can you please guide me the right place.Thanks !

    Reply

  • avatar
    Tanishq.Capital

    Zerodha SPAN and Equity MArgin calulator in ZERODHA.COM Not working for last 3/4 days…Please check

    Reply

    • avatar
      Hanan

      It seems to be working for us. Can you give us details of what kind of issue you’re facing?

      Reply

  • avatar
    Alok

    Why Zerodha Span for CD is not working ?

    Reply

  • avatar
    Keshav

    Hi,

    I just noticed that Natural Gas is missing from the list under SPAM -> Commodities. Kindly let me know the margin requirement.

    Thanks

    Reply

  • avatar
    Ram

    Hi,

    1) Could I pledge securities and use the margin for intraday trades?
    2) Could I pledge securites and trade on Currency derivatives?
    3) What is the cost of pledge?
    4) How to revoke pledge?

    Reply

    • avatar
      Nithin Kamath Post author

      1. Yes, for intraday futures and option writing trades.
      2. Yes, currency futures and option writing trades

      *Option buying is not allowed.

      3. around Rs 55 for a complete round trip of pledge/unpledge for every scrip pledged.
      4. To pledge, you have to send an email to support@zerodha.com, and same to revoke. We will soon have this available on Q itself.

      Reply

  • avatar
    Umesh

    Dear Nithin,
    Thanks a lot for all the knowledge which you have been imparting. I wanted to ask you a very basic questions about writing options(as I am relatively new to this). It is about writing NIFTY 8200 PE 29 Jan 2015. the details which I receive from the spam calculator are

    Combined margin requirements
    SPAN margin
    Rs: 6,826
    Exposure margin
    Rs: 6,225
    Premium receivable ?
    Rs: 551
    Total margin ?
    Rs: 13,051
    Now my question is with about 16 days to expiry the margin which I have to provide is Rs 13,051 for the above contract. does this margin will remain constant till the expiry if the price of underlying move in the favorable direction to my trade? also if the price moves adversely then how will the margin increase? If Nifty expires at 8201 will I be keeping the above premium and the margin? Pl reply

    Reply

    • avatar
      Nithin Kamath Post author

      If your trade is favorable, the margin slowly decreases as you get closer to expiry. But it is just a marginal reduction.

      If the trade starts going against you, margin increase depends on how much the volatility increases in the market. There is not an exact figure for this.

      Yes, if Nifty closes above 8200, you get to keep all the premium. Margin is anyway always in your account. Check this post on option writing.

      Reply

  • avatar
    S Mohan

    Dear sir,

    I am an new trader to zerodha platform , just checking the margin calculator before starting active trading..
    Example :
    Unitech option buy strike price =20,00 Price = 2.65 Margin required = र 23,850.00 since 2.65 *9000 is the maximum amount which we loose if option expire worthless.

    But in Zerodha span calculator total margin = 0 .. Will this work only for span , if i want to calculate individual margin where to can i his info

    Thanks,
    Mohan.S

    Reply

    • avatar
      Nithin Kamath Post author

      Mohan, while buying options there is no concept called margins. You need only the premium to buy. So in your example, you need only Rs 23850 to buy. Since there is no margin, if you add buy option positions, the span calculator will show 0.

      Reply

  • avatar
    R Ganesan

    I checked with zerodha margin calculator yesterday.

    No margins are getting displayed and N/A is appearing. Pl. check.

    Reply

  • avatar
    Anil Pandav

    Hi Sir/Madam,
    I want to know that if i am going for short sell a nifty call or put option or a stock option at the begining of a month and buying it back (for square off my position) on 1 or 2 days before the expiry of that option, would it cost me any panalty for that? Can i trade in that way.

    Please reply on this. Thanks in advance for your support. You can reply on email id- anilpandav@ymail.com

    Reply

    • avatar
      Nithin Kamath Post author

      No Anil, there is no penalty for that. The only issue is if you let the options that you have bought (Buy options and not Short options) expire in the money. Explained in this post.

      Reply

      • avatar
        Anil Pandav

        Thank You for reply. Its realy useful for me. Thanks.

        Reply

  • avatar
    A.N.Charlu

    I want to calculate margin, using your span-calculator for December contracts of Nifty. This is not enabled. How can I get the margin details for this?
    Thanks.

    Reply

  • avatar
    A.N.Charlu

    Hi Nitin

    Can you please confirm the correctness of the following span margin calculated :

    Reply

  • avatar
    Anil Pandav

    Hi,

    when I calculated the margin requirement for writing 7900 apr 2015 put and 9300 apr 2015 call, it show me 104500 and my receivable premium is only 1555. why it is so??? It means that it requires 67 times of premium. Please reply.

    Reply

    • avatar
      Nithin Kamath Post author

      Anil what the SPAN shows is what our exchanges ask for. This is not something that is in our hand. When you write 7900 puts and 9300 calls, you are still carrying a completely open risk position. So if tonight there is some extreme market news, and tomm if market opens at say 7000 or 10000, your loss could be quite a bit. Since there is an unlimited risk, a higher margin is charged. But if you bought say a 7800 put and 9400 call along with this, your risk is completely hedged. You will see the drop in margins.

      Best,

      Reply

      • avatar
        Anil Pandav

        Got it. Thanks for your explaining.

        Reply

  • avatar
    Anil

    Hi Nithin,

    I have calculated the margin by adding buy position of 7800 put and 9400 call and the margin requirement come down from 68 times to 30 times of premium receivable. So is there any other way to reduce the margin requirement and is it because of volatility in the market?

    Thanks in advance for your support.

    Reply

    • avatar
      Nithin Kamath Post author

      Like I was saying Anil, margin requirement is determined by the exchanges and not the broker. Yes, margins go up with increase in volatility.

      Reply

  • avatar
    Mahadish

    Sir,

    As seen in the below screenshot, total margin required for Reliance future 1 lot is Rs. 25742.
    If in my account i have 26000, and i buy 1 lot. But at EOD i am at a loss of say 5000 rs.
    So will i be able to hold onto my position till how long?
    Can i hold the position till i have exposure margin thr in my account?

    Reply

    • avatar
      Nithin Kamath Post author

      Mahadish, ideally you should have the entire 25k. But yes, our RMS team waits for upto around 20% below this value. So if tomorrow before market closing, your account balance is less than 20k, they will auto close the position. But this is completely based on market conditions, we might more stricter around news events. Best to keep the entire margin all the time.

      Reply

      • avatar
        Mahadish

        Thanks Sir :)

        Reply

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