Zerodha F&O margin Calculator
Traders,
Zerodha F&O margin 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.
The calculator 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 F&O margin calculator can be used,
For Future Margin Requirements
See the example below for Nifty November futures margin requirement.
Total Margin = Span/initial + 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.
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/initial + 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.
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/initial margin + Exposure margi
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 F&O margin calculator accounts for 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.
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. 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 F&O margin calculator will show the margin required and the benefit for entering this strategy in a jiffy.
Total Margin = Span/initial + 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.
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,
Nithin Kamath
Founder & CEO @ Zerodha. Partnering startups through Rainmatter. Love playing poker, basketball, and guitar. @Nithin0dha on Twitter. | Personal website: https://nithinkamath.me
Very Nice.. Thanks for this…
I found margin requirement in zerodha absurd once I asked that I need to buy spread of nifty call option and they were asking for the full margin for the short leg, just giving the benefit of the option premium. what I don’t understand why do l need to put so much margin for a spread.
Shashank, the SPAN and exposure margin requirement is set by exchanges and not us. It is the same across all brokers. Check this: http://tradingqna.com/949/span-margin-for-a-hedged-postion
Hi Nithin,
Thanks for your reply, but is it not possible to implement some system where its checks the margin requirement when somebody takes the position and when someone square it off as well? So, if some has a spread with lower margin he won’t be able to sell the long leg of the spread until either he has sufficient margin or until he square off the short leg first. And I have one more question, If I buy nifty future and sell a call why the span calculator Shows margin requirement for both the positions? It doesn’t make any sense and believe me in other brokerage firms you can easily sell a call without any extra margin if you hold a position in nifty
Hi Nithin,
I was hoping to get an answer from you on the above query. Please clarify at least, why I need to put margin separately for shorting a call option if I hold a long position in Nifty?
In this case if I am long nifty and shorting call than the margin should be max(margin for long nifty, margin for short call). If you think its not correct please explain.
Thanks
Check this http://tradingqna.com/949/span-margin-for-a-hedged-postion
Hi Sir,
Rs 8155
I couldn’t place BracketOrder for the following..
1) OTM stock option writing
2) OTM currency option
The screen shows blocked by zerodha.
Only Index options i can place my orders. I put the stoploss very low.
The second thing is the margin required for MIS and BO are same for selling OTM INDEX option. Why No Reduction in margin ?
Plesae rectify and solve the problem asap.
With Thanks & Regards…
Siyad
You can’t place Bracket order for Stock options and currency options. Margins for BO is typically 10-15% lower than what it’s for MIS.
Dear Nitin,
My client ID ZS9598
I have beow queries on F&O margin obligation:
1)Suppose if I have NRML position on Yes Bank 10los 300CE taken on 28Oct2017 purchased at Rs20/- and sell all lots in morning on 06Nov2017 at Rs 40/-. On same day 06N0v2017 in afternoon I repurchase all lots at 30/- I make profit 10/- per unit. I have fund balance of Just 100/-. Will it attract F&O obligation charges and pls explain answer.
2)second scenario, I purchase RELIANCE 950CE on 06Nov2017 using Yesbank sold CE option. Any F&O obligation attract. I have Rs 100/- fund balance and equity holding zero. Pls explain reasons.
3)in third scenario suppose in case 1 & 2, I am holding Equity of 20lacs of MRF shares… What effect on F&O obligation. Pls explains reasons.
Sir I am totally confuse on F&O obligation charges.. Till today my account has debited Rs 40thousand as F&O obligation penalty.. Your clarification in layman’s terms will help me to save my hard earned money. Pls share call number in case further clarification.
Regards,
Jagannath
7045274806
1. Sell trade on 6 Nov at 40 and buy trade at 30 on the same day will be accounted as an intraday trade and you will make Rs.10 intraday profit. Your initial buy position of 10 lots at 20 will still be there in your account.
2. Yes, you can sell an option and use the funds released from that to buy another option.
3. Equity holdings have no effect on F&O positions. You can pledge equity and trade with the collateral margin where you can trade futures and write options. But still option buy requires full cash and you need to have free cash in your account to buy options.
F&O obligation amount is not a penalty. It is the profit/loss you make in futures on a daily settlement basis and it will also reflect the amount paid for option buying/amount released for sold options.
Margin is by default calculated for 15 lots. I wanted to calculate margin for one lot of bank nifty. I put one lot in quantity. But it automatically took 15 lots.
The client has to pay the margin because Mr. Nithin is a price maker and we clients, both as price takers and risk takers have to come up with the margin to back up our hunch. 🙂
The margins are decided by the Exchange and levied by them. Pretty much nothing that we can do here 🙂
sir
in mcx margin span margin calculator is not calculating the elm margin which is 1%.it calculate only span margin
please check it sir
ELM is included in the SPAN margin calculation Akash.
Is there a way I can see my current margin money invested on open FNO positions in Kite?
Yea, go to funds.
Futures details are very informative and helpful. I am totally new to F&O and I would like to know how client can make profit.
Is it possible to show how we can make profit by using Future & Options/Call-put/ce/pe, how we can make profit by using these options??
Best check out Varsity.
How much margin required currently for iron condor in nifty and bank nifty at latest closinglevels?
i am cofused your margin calculater shows soming and on trading flatform expect some thing more. for bank nifty cals shows 32000 required for intraday but on trading a/c 42000?????????
Anand, the margin requirement changes based on your portfolio. Account for all your open positions to get a clearer picture.
Hi sir,
Then why are you not updating your Zerodha margin calculator tool ??… We can see the margin required for selling option ( stock, currency) in your tool. When I checked for the margin requirement to sell a currency option ( OTM ), it shows only 100 RS for one lot in BRACKET ORDER. OTM currency options are always having higher liquidity. You can check…. Usually Margin required to sell a currency option is 1500 for Normal and 750 for intraday MIS. So, if it is only 100 RS for Bracket Order it will be more benefitable. Also options of stocks like SBI, MARUTI, RELIANCE are highly liquidable . The last point is I require more margin for BO , only for the expiry day. So please do the needful.
What will be the margin required for selling a far away OTM banknifty option in MIS and in BO on expiry day?? There will be stop-loss 5 points… Please reply personally, As if I check in your Zerodha margin calculator the answer will not practically applicable.
With Thanks & Regards…
Siyad
There’s no option to place BO for Stock options and currency options. The leverage given is standard to all our clients.
sir please update latest date margin calculator
I am not able to calculate margins for weekly bank nifty options
I am also not able to calculate margins for weekly bank nifty options, can anyone help on the same.
I am also not able to calculate margins for weekly bank nifty & nifty options
Margins for the weekly and monthly contracts are the same, refer to the monthly contract margin requirements.
if i want to go short on banknifty how much should i have if it is 200*40 weekly expiry
Whether stocks held in my portfolio can contribute towards margin requirement mandated by exchange.
Please update the option pics. put recent. Present pics are from 2013
whitout use buy option margin -Available margin
5,482.42
Used margin
-3,582.72
Available cash
5,482.42
Opening balance 1,899.70
Payin 0.00
SPAN 0.00
Delivery margin 895.68
Exposure 0.00
Options premium 0.00
Collateral (Liquid funds) 0.00
The margin calculator is not working properly its giving error NaN and not processing either loading icons . Please rectify.
Hi Arvind, we’re sorry for the inconvenience. The margin calculator is working fine now. Could you please retry and check?
Margin calculator failed to give me proper figures.Was there some problem today? I was to buy CE 17500 NIFTY APR EXPIRY.The answer it gave was zero.
Hi Dev, buying options require full premium and not margins. Hence premium values to buy options don’t show up in the above F&O margin calculator.
Not many brokers out there who think like u guys..
Are these margins applicable only for those who have opted for zerodha trader or also for those who use nse now?
It is for Zerodha Trader, for NOW there would be a small variance.
Hi Nithin,
I was trying the SPAN margin calculator for ICICI Bank OCT futures. While SPAN calculator shows a margin of Rs.43,000, future margin list shows around Rs. 35000. I have noticed this difference for all stocks and really don’t know if this is a technical glitch. We have discussed this some time ago last month also. Just wanted this to bring to your notice. I have attached the screen shots.
Regards,
Ranjan
Screen shot taken from the list of stocks
Checking this.
Ranjan, looks like you checked this midnight when our end of day process was running. SPAN and margin calculator will match with what is on the trading terminal. That said, there could be upto 10% difference up or down.
Thanks Nithin. I had checked this around midnight yesterday. Have checked now again and this seems to be working fine now.
Nithin, I had another query with regards to the MTM adjustments for which I request your reply:
Suppose I deposited Rs. 50,000 in the trading account and took NRML F&O position where initial margin (SPAN+exposure) blocked was say Rs. 30,000. This gives a free cash of Rs. 20,000. Now if there is a MTM loss of Rs. 2,000 on day 1 , will that be adjusted against the initial margin (from the exposure portion of the total margin) or from the free cash?What I noted from one of my transactions is this gets adjusted against the free cash.
What I was under the impression is that, MTM losses would be adjusted against the exposure margin first and when total margin falls or nears to SPAN one will get a margin call (I had refereed varsity section-futures trading, mark to market chapter). My query primarily is if there is sufficient free cash and all mark to market adjustments are done on it, one may never get a margin call and would end up accumulating losses if the position is not tracked properly.
Request your inputs on how M2M adjustments happen at Zerodha.
Many thanks and regards,
Ranjan
The MTM loss will be adjusted from the free cash, and it will start biting on your exposure margin only once all free cash is exhausted. Yes, if you keep some cash as buffer, u will never get a margin call.
Thanks Nithin..In that case suppose there is no free cash, what’s the maximum MTM loss that can be adjusted against the exposure margin..I mean when can Zerodha’s Risk team close the position or margin call will be made?
Ranjan, we don’t really make a call as such. Say by 3.10 to 3.20pm the margin in your account is close to the SPAN margin requirement or lesser, we square off the position automatically.
So, for MTM, you first adjust with free cash and then with exposure margin.
And once exposure margin has become 0, automatic square off will happen.
So effectively you never touch the span margin?
Yep.
HELLO NITIN SIR
SIR IS THERE ANY PROBLEM IN SPAN MARGIN CALCULATOR
BECOZ WHEN I AM ADDING CURRENCY SCRIPT IN CALCULATOR IT NOT SHOWING THE MARGIN.PLZ HELP ME SIR
Checking. Will have this fixed.
THX VENU SIR
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.
Cover orders are still not approved by MCX, we are pushing for it though.
when will ur new software lunch
We are working on it, might take 2 to 3 months more.
new software still not launchef.
Any updates on the latest software which u promised to be released by end of this year?
We are working on it, might take 2 to 3 months more.
ssss
In ICICIDIRECT there is something called Margin Buy and Margin Sell. Does ZERODHA has similar service available for the customer ?
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!
Hi,
I am not very clear about the margin needed for F&O trading on Zerodha. For example, if i refer your SPAN calculator for say LT-27-Aug-15,I note that Rs. 34,912 is needed to place a NRML order. Now if i refer the link https://zerodha.com/margin-calculator/Futures/, Rs. 27,589 is needed. In the former case it works out to be 15% of the contract value and the latter case it’s 12%. This appears higher than what other brokers e.g ICICI Sec need. In fact I have known them to need 10-12% of the contract value for most of the nifty 50 bluechip names like ICICI, SBI, LT, HDFC Bank etc. Request you to first clear the ambiguity on the SPAN calculator and the link i provided above. Secondly, please correct me if I am wrong on saying that the said brokers require less margin.
Ranjan, don’t know if you are checking it out right. I see LT Aug futures margin same 27850 on SPAN and futures link. The margin charged is regulated by the exchange, only Nifty futures margin is around 10% of contract value. All stock futures, start atleast at 15%. We settle with the exchange on T+0 basis, so among the list of brokers charging the least margin.
Nithin, Thanks for your reply.
Yeah, Now if i see both links throws the same margin of Rs. 27,580. However, I beg to differ with you on the minimum margin needed @15% for stock futures. I know for sure that ICICI Sec takes around 10.5-11% as initial margin for stocks like LT, SBI,HDFC Bank. However, I appreciate Zerodha giving higher leverage on intraday basis. I don’t have an account with Zerodha yet and was planning to have one shortly. Could you please throw some light on the end of day MTM profit/loss adjustments and margin release/call policy that Zerodha follows? As in, do i need to maintain funds in the trading account or it can be debited/credited from/to the linked bank account? Also, is simplified P&L statement/portfolio tracker etc provided within the web platform to enable tax calculation? Finally, your views on the minimum lot size increased by SEBI recently?
Hmm.. I don’t think ICICI Sec charges 10.5 -11%, can u provide me the link where you are seeing this.
As long as the MTM loss is less than 20% of total margin required, no issues. More than that, our RMS team can square off the position. You will have to maintain in trading account.
Yep, probably the best reporting tools in Q and Quant: http://zerodha.com/z-connect/category/tradezerodha
Nithin, I tried to send you the link; however, that’s a secured link and can be viewed only when logged in…they have something of their own called Non-SPAN margin and the 10.5-11% i was talking was related to that only. nonetheless, I am not here to debate who needs the least margin…neither I am comparing Zerodha with anyone.. I am new to this world and just had the curiosity..nothing else 🙂
Look forward to be a Zerodha member soon
Ranjan, I started trading with ICICI, so I kind of have a fair idea on what/how is charged as margin. The non-span margin is called exposure margin with us, and yeah that could start at 10% of the contract. But the total margin is sum of SPAN + exposure/non span. SPAN charged by exchange almost same for every exchange. :). So yeah, total margins should be more or less the same with ICICI. If you are starting off, advise you to check out: http://zerodha.com/varsity/
Thanks Nithin. I will definitely go through the link provided by you. I just wanted to highlight that ICICI have two types of margin system 1. SPAN and 2. Non-Span. For a customer who is mapped to SPAN, total margin blocked is same as Zerodha but for the customer who is mapped to Non-SPAN it’s slightly less. I am not sure if there is any catch here. e.g I could buy 1 lot of LT 27 Aug futures with Rs. 24,800 as margin under the non-SPAN system. Had I been mapped to SPAN, I would have needed around Rs. 27,500 (for the same price of futures contract) , which is the same as needed by Zerodha…so not of a much difference. I have asked them to explain the difference and await their reply. Appreciate your efforts and time to reply directly. Have read about you on many platforms and your journey has been inspirational. Regards-Ranjan.
Nithin, i just noted that even though they don’t deduct entire amount from the bank account, they do block the difference in the trading account. So, in effect margin blocked is same as in normal SPAN system guided by the exchange and followed at Zerodha. You are correct. Thanks!
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
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,
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
Thanks Akash for pointing, we will have this fixed.
This is done.
THANKS A LOT SIR…..THANK YOU VERY MUCH NITIN JI
SIR
MARGIN CALCULATING IN CURRENCY SEGMENT IS NOT WORKING
Sir,
Can’t we buy stock options in zerodha ?? Because when i am calculating the margin, i am getting an error ” options buying is enabled only for nifty and bank nifty “. If we can buy pls provide me the link to check margin requirement for buying call options of shares for intraday
Varun for buying options there is no concept called margin. When buying you need the entire premium to buy, while shorting/writing options is when you need margin (which can be calculated using SPAN). When buying options we give additional intraday leverage only for Nifty/Banknifty. So if lot size is 100 and premium is Rs 10, you will need Rs 1000 to buy this.
Thanks for providing the online span calculator
[…] Zerodha SPAN featured – Tech tools in Hindu Business line, to know how to use check this blog. […]
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?
Yes, it is for shorted positions. Buy options will be separate, as they are not categorized as margins.
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 🙂
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,
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
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,
Thank you so much sir… 🙂
Hi Nithin, Many of the features of Nest Trader (PC) are not available on Mobile (Android). Is there any upgrade planned?
There should be a new release in the next 10 days. The SPAN calculator is a web app, you can use this on any browser though, here is the link: http://zerodha.com/margin-calculator/SPAN
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?
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.
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
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 ?
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.
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 ?
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.
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.
New BO coming up very soon you should be pleasantly surprised, new trading application also will be up soon.
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 % –
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,
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.
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.
Ah, k, let me bounce it off our team.
OK SIR
This is done Akash, you can see the margins for interest rate futures here: https://zerodha.com/margin-calculator/Currency/
thx a lot sir….but i will be very grateful to you if you give this option in your margin calculator
Nagbushan,
The tool is up..
Cheers,
Thanks Nithin for fast response and looking into the issue.. cheers
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
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.
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…
Total margin is the cash that is required for holding this strategy
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
Swapnil, Which browser are you using, it seems to be working fine on mine, can you shoot an email to [email protected] with your contact, will get someone to call back and check your browser.
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
🙂 , 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,
That is cool. Do you have a working version of Beta?!
Can I use my existing stocks (Purchased for long term) as collateral for margin requirements? How do I do it? Please explain
Yes you can, shoot an email to [email protected] and [email protected], 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,
Span calculator not working for the past 2 days?
Anand it is working fine on google chrome, some issue with firefox, and internet explorer. Checking this out.
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 )
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.
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 ?
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.
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…
Sibi,
We have put a restriction on order size for AMO orders, what is the size of each of the orders you are placing?
The same issue is with me. Plz say the limit which i have to keep in mind
Are you trying to place an SL order or an order with disclosed quantity?
The margin calculator does not have all the contracts for Commodities. Lead, Zinc, Gold Petal, etc are missing. Pls look into the issue
hi nithin want to know the margin for natural gas not able to see the same in span calculator
Nitesh check here
HI Nithin Thanks for the Reply But How much will be the Amount for A hedge in NG for FEB & March
For the Calendar spread between Feb and March, margin required is around 73110
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…
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,
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.
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
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
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.
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 ?
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.
Thanks ,Now It’s clear
Hi,
I am not getting margin details for MCX contracts.
Kaushal,
Having this checked,
Working now
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.
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.
Thank you so much.
nitin sir need help span margin calculator is not working in any segment it will grateful to you if you check once
We are working on getting it up soon.
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
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,
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)
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.
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
Patel,
You will need 44795 + 2715 + 1069 (your buy premium values)
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
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.
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
Thanks Shivam
Answered here: http://tradingqna.com/949/span-margin-for-a-hedged-postion
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
When you buy an option, there is no SPAN margin, disregard if it is showing negative, we will have it fixed today.
Cheers,
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.
i mean how much money is required to take this position initially..
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,
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?
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.
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?
Yep
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.
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
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.
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.
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.
Can i use futures as covered position too sell calls?
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.
Thanks Nithin!
Would that be zero margin to sell call on the future posotion?
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..
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 ??
its working fine now.. it wasnt working after market hours !
Sir how can we use NSE amount for MCX orders…. is there any optiion
No Mohan, we are legally not allowed to let you trade on MCX using funds in equity or vice a versa.
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?
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.
Do we have to pay any interest on the margin amount on future trading if I hold the stock the till the expiry date.
No Mohsin, futures have inherent margin and hence you don’t need to pay any interest even if you hold it till expiry date.
Please update the SPAN calculator for margin calculation of those index contracts whose option buying has been recently enabled. Thanks!
For option buying leverage, you need to use bracket/cover orders and hence need to use the BO&CO calculator. This is already updated.
My bad! Thanks for the clarification.
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
Salesh, you can enter all those details on the SPAN calculator and check out for yourself.
Dear Nithin,
Launch ‘PI’ at the earliest possible time, waiting for it 🙂
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?
The way it is designed presently, it can’t take live market quotes, it is on our list of things to do.
how much margin for BFO BSX ??? intra and positional and where to check it ?
Vishal, we are still not getting the files for margin requirements, but it is around 10% of the contract, the lotsize is 15
SPAN calculato is not working after market hours? I am using Google chrome browser.
Yes, we will have this fixed.
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 ?
You will have to first pledge your shares by sending an email request to [email protected]. 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.
Hi ,
Is margin available on selected stocks of equity or all the stocks in NSE ?
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?
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.
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.
We will add all commodities on the SPAN calculator soon. Do check it out after 2 days.
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.
Called 2FA authentication, here is the link.
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.
Yes, Pi will be up soon. We have over 200 testing it out already. Check this for an overview.
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
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.
Thank you Sir for your reply,
Overnight position means till Expiry date, can i sell on or before expiry date
Yes, you can sell on or before expiry date.
Hi Nithin,
Thank you,
could you please let me know the difference between Equity Intraday and Futures Inraday, only the Margin amount is different?
Yeah margin amount is different, in equity there is no lot size,but in futures you have to buy/sell as multiple of lots.
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?
Both are one and the same Manohar. People call it equity derivatives, equity futures, futures, they all mean the same.
Thank you SO much, i Would like to open account with Zerodha, DO we have call and trade option
If i send all mandatory documents , in how many days account will be opened and when can i trade
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.
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)
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.
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.
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?
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.
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
SPAN MARGIN CALCULATOR NOT WORKING!!
Span Margin Calculator is not working..
Yes, working on getting it fixed.
not working again
Hi,
I am not able to see MIS Vs NRML margin requirements. Can you please guide me the right place.Thanks !
Check out http://www.zerodha.com/margin-calculator
Zerodha SPAN and Equity MArgin calulator in ZERODHA.COM Not working for last 3/4 days…Please check
It seems to be working for us. Can you give us details of what kind of issue you’re facing?
hello hanan sir
your span margin calculator for fo and currency is not working
Yes Akash, some issue today, we are working on having it fixed soon.
Why Zerodha Span for CD is not working ?
Hi,
I just noticed that Natural Gas is missing from the list under SPAM -> Commodities. Kindly let me know the margin requirement.
Thanks
You can see it here, NRML margin of around 30k
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?
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 [email protected], and same to revoke. We will soon have this available on Q itself.
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
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.
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
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.
I checked with zerodha margin calculator yesterday.
No margins are getting displayed and N/A is appearing. Pl. check.
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- [email protected]
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.
Thank You for reply. Its realy useful for me. Thanks.
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.
Let me have this checked.
Any Updates on Leaps (Long term options) of Nifty……..I only see 3 months Nifty options available in the SPAN calculator while in the watchlist we can buy and sell upto 2017 eg I am interested in Dec 2016 option writing. Please let me know the margin requirements for the same.
Sarita, we allow trading on LEAPS, will check why SPAN is not showing them.
Nitin would appreciate an update on this. I am planning a strategy that would depend on this information. Could not find this detail anywhere.
Sarita, unfortunately the SPAN can’t calculate margin requirements for long dated options currently. We are working on this. Until then, you can assume that margin required could be upto 50% higher than near month contracts.
Sir,
Yet span cal. Is not showing nifty leaps.
Nifty Leaps is a little tricky to show here. It is on our list of things to do.
Hi Nitin
Can you please confirm the correctness of the following span margin calculated :
Yes, that is correct.
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.
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,
Got it. Thanks for your explaining.
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.
Like I was saying Anil, margin requirement is determined by the exchanges and not the broker. Yes, margins go up with increase in volatility.
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?
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.
Thanks Sir 🙂
There seems to be a flaw in the calculation of Margin requirements on a special case of Spread Put Option sales…
Consider that I Short Sell (Write) 100 NIFTY May-2015 Put Options @ Strike Price 8500, and simultaneously Buy 100 NIFTY May-2015 Put Options @ Strike Price 8800.
I understand that I have to pay the difference in premium between the bought Puts and sold Puts (because the sold 8500 Put is cheaper), but the combination spread position has no further Risk of loss as my Long Puts will always have higher value than my Short Puts. So, there should be no need for a further Margin in this special case (beyond the premium difference paid up front)!!
Why then is the SPAN Margin Calculator asking for a total Margin of Rs. 17000+ for this case – almost the same Margin as for the reverse case of Short Sell 100 Puts @8800 and Buy 100 Puts @8500 (where a risk exposure of Rs. 30,000 exists) ?
Is this a case that is simply not handled correctly in the SPAN calculator’s code, or is there some crazy logic to this ?
(BTW, don’t ask how one will make money selling 8500 Puts and buying 8800 Puts… It makes sense when premium diff between the Puts is << 300 and one feels that NIFTY is sure to close below 8500… but it works only if the Margin requirement for the spread is 0 or very low…)
Thanks. Krish.
Sorry… a couple of mistakes in the example above…
– The quantity of options I calculated with was 25, not 100 as mentioned above.
– I earlier saw only total at the bottom of the table of individual margins, which was Rs. 17000+.
The “combined margin requirement” table shows the total margin of ~ Rs. 8000.
This is lower than in the reverse case (where it is Rs. 17,000+), but still, my question stands !!
Why is there a margin required in my example case?
Thanks.
Regards, Krish
Krishnamurthy, what the SPAN tool of ours calculates is what the exchanges calculate. How much margin to be blocked is actually stipulated by the exchange and not us.
Coming back to why charge when the risk is limited on short 8500 put when you are long 8800 put? Have answered it a few times before on this post. Exchanges have to also factor in what is called an execution risk. What if once you have taken this position, you decide to exit long 8800 puts first? Because if you do, then you will now have naked short 8500 puts with unlimited risk, maybe with not enough margin in your account. What if you intend to exit both, 8800 puts get filled because it was liquid, and 8500 put remains pending in the system? So when exchanges calculate margin, they have to factor in all that risk.
The only strategy which exchanges recognize is the calendar spread. So if you buy this month future, and sell next month or vice versa, margin is blocked only on one side.
Hopefully clarifies.
Dear Nithin,
First of all, thanks for patiently answering my query, and happy to find someone at an Indian brokerage who understands this topic well enough to engage in an open conversation about it…
I understand that it is the Exchange that specifies the Margin needs and not you. However, the logic given to defend this unreasonable margin charge by NSE is not rational. If I attempt to close my Long 8800 Puts before my Short 8500 Puts, margin would be due at that time – as if I am taking a fresh Naked Short position. Execution risk on close-out of combo position is easily avoided if NSE just closes the Short position before the Long one.
Besides, this is a standard strategy named Bear Put Spreads (or Long Put Spreads), for which NO OTHER Exchange/Broker IN THE WORLD outside India charges a Margin. You can check it out at CBOE’s margin calculator site: http://www.cboe.com/tradtool/mcalc/.
They all treat these Vertical Spreads as much safer than Calendar Spreads !!
By the way, all other exchanges also use the same SPAN tool from CME that NSE uses.
So, NSE charging these high Margins on such Long Spreads is really highway robbery (swallowing like a month’s worth of Interest on the undue Margin money)…
As an individual investor, I have little leverage to protest this with NSE. So, I hope that big broker members like you would help protest this practise of NSE instead of defending it.
This practise hurts you as much (if not more than) it hurts small timers. It also distorts option prices and kills the market for Deep In The Money options until close to expiry…
So, I hope to get your support for pushing NSE to recognize Vertical Spreads and stop this distortion…
Thanks. Krish
Yep Krish, one of the things that we put forth everytime we meet the exchanges, higher margins on vertical spreads.
pl inform me what shall be the margin to be placed with your company if:
I wish to write (short) a call and a put for INTRADAY trade of different strike price/s or how many calls and puts (equal numbers ) your system allows per ONE lac of rupees as of today
This varies based on which strike, u can calculate all of this yourself on our SPAN calculator https://zerodha.com/margin-calculator/SPAN/. The post above explains how you can use this.
I am thinking of investing in Goldman Sachs Mutual Fund – Nifty Junior ETF
1) Can I use this as collaterals for option trading.
2) What would be the haircut for this fund? where can I see the haircut for any fund/stock?
3) Please confirm my understanding that ETFs cannot be purchased through the fundhouse, they can only be purchased through a broker like zerodha
4) whatever amount span margin comes up with for a particular set of options, the ETF holdings can be considered for 90% of the margin & 10% of the margin has to be held in cash. Is that correct?
1. Yes you can use it as collateral. But you are allowed to use this collateral only for futures trading or options writing (no option buying).
2. Haircut will be around 15%, this is the link for all approved stocks. It currently doesn’t show haircut %, we will try to incorporate this soon.
3. yes, ETF: Exchange traded funds, so you need a broker to buy ETF’s
4. Yes there is no mandate to keep 10% cash, but it is best to keep so that in case of any loss, this cash component can cover that.
Thanks for the prompt reply.
Regarding Point 1), If I sell 8800 Call and buy 9000 Call, then I dont need any cash for buying the 9000 call right?
You will Karthik, the money that you receive from shorting 8800 calls get credited to you only on T+1. So if you buy 9000 call immediately, you need cash, but if you buy it tomm you will not need.
Dear Nitin,
My Zerodha ID is DA0755. I need to know one thing whether zerodha can trade with client money without the client permission. As today on 24-06-2015 i came across a situation where cash balance shown in back office (q.zerodha.com) before the start of trading session on 24 -06-2015 was positive and same was also confirmed by the zerodha employee over the phone ( screen shot and telephone recording can be sent if required), limit shown on trade.zerodha.com is negative (screen shot can be sent if required and because of wrong negative balance my two order could not be placed having far less value than the cash reserve shown in backoffice ) and by the end of the day around 0007 hrs (25-06-2015) my cash value was also different altogether (Screen shot can be sent if required).
I want to know how the limit can be negative without any order of client and by the end of the day cash value also changes.I also could not place the two order for the script which ultimately locked in the segment upper circuit.
I had full trust in Zerodha and infact advised others also to open the Zerodha Account. But after today incident i have serious about the integrity of the functioning of Zerodha.
Kindly provide some explanation. I have attached the screenshot for your reference also.
Picture 1 – Negative RMS limit shown in the order book status. Totally wrong.
Guess this issue had happened because you had looked at Q while the trade process was running in the evening. During trade process, one step is when yesterday’s margin gets debited and then new margin for the day is applied. If you would have looked at Q during this process, account balance would have shown wrong.
When will it be fixed?
Working now.
I have used the PC SPAN Software provided by NSE to calculate Span Margin.
I find that there is major difference between your online calculator and PC SPAN.
eg. Nifty Near Month JUL 2015 – (25 qty)
PC SPAN shows approx 14500 – 1500
Zerodha show apporx – 10500- 11000
I was wondering if you use only the 16th scenario. I can see that as per SPAN Max Loss value seen from 1-16 scenario is not matching with PC – SPAN software with me.
I can also see that your values are matching with other brokers also but when everything is based on SPAN calculation can you explain why this difference is shown.
I wanted to rely on only one calculation but this confusion has to be cleared to take proper decision.
I am trying to build my trading strategy and all these factors are important to me.
Your help in this regard will be highly appreciated. Thanking you in anticipation.
Salil, what exchanges ask us to collect is SPAN + exposure. Don’t think PC SPAN can calculate Exposure margins. Don’t have the answer for this because the SPAN calculation is coded within the OMS/RMS and this is maintained by our technology vendor (Thomson Reuters). I will try to find out from them though.
I understand adding Exposure Margin will increase the Total Margin requirement.
My focus is on why Span is different. In my example above SPAN Margin shown in Zerodha calculator smaller than PC SPAN Software. I sincerely appreciate your effort of looking into your RMS/OMS for me. Awaiting your reply.
Salil our vendors are clueless about this. Since the OMS is not our in house product, can’t really give you an answer. But I can tell you this that what we block matches what exchanges ask us for. So the SPAN calculations done by our OMS/RMS is as per NSE requirement.
I understand that this thread is a bit old, but have you guys figured this (why span is different) out yet ?
I have found the answer for the difference, there is no need to ask your OMS/RMS Vendor. When I used the SPN file ending with _1 from NSEs website the PC SPAN values matches your calculation.
This raises another question what is the purpose of TWO (SPN) files being kept on Exchange and in what circumstances either of them needs to be used.
Did you get the answer to this question? Can you please share the link to the PC Span software. i couldn’t find it on CME website!!!
Hi Nithin
If I trade an iron condor,
say nifty is at 8400 spot
I write a 8800 call, buy a 9000 call
I write a 8000 put, buy a 7800 put
Is there some way by which I can place an automatic conditional order like this –
for eg. if nifty is at 8100 or 8700 I would like to close all 4 legs of the iron condor.
Please advise.
Thanks
No Karthik, currently no such option.
Is the NSE Derivative SPAN Margin same for all members ?
Yes SPAN margin is the same.
Dear Sir,
Sebi raises minimum contract size in equity derivatives to Rs 5 lakh.
Could you pls. explain the above in little details.
Say If TATAMOTORS Margin requirement is 25000 and lot size of 500 and current price is 400.
What would be the changes to the above as per the new law?
If lot size is 500 and price is 400, the current contract size is 500 x 400 = Rs 2lks. The new contract size has to be Rs 5lks, so the lot size will go up to 1250, and margin required will also go upto around Rs 70,000.
This is not good for a normal trader
Any posibility tht put a stay on dis?
This is not good for a normal trader
Any posibility tht put a stay on dis?
I guess exchanges are trying to reason it out with SEBI.
Hi,
Please explain me the difference between ‘Span Margin’, ‘Exposure Margin’, and ‘Total Margin’
Thanks,
Santosh
SPAN margin is the minimum margin stipulated by exchange. Exposure is the margin over and above SPAN that exchanges ask broker to keep. Total = SPAN + Exposure, and total is what is required to take a position.
Hello Mr Nithin Kamath,
The issue raised by AYUSHSCZDH on 25 Jun 2015 at 12:18 AM is a serious one and you have not yet responded to it. I was in the process of finalizing opening of a trading account with Zerodha. But after AYUSHSCZDH’s comments on the limit money, I am forced to re-think about the same. A response to the issue by you will benefit prospective traders.
Have answered that query: Guess this issue had happened because you had looked at Q while the trade process was running in the evening. During trade process, one step is when yesterday’s margin gets debited and then new margin for the day is applied. If you would have looked at Q during this process, account balance would have shown wrong.
Hi Mr Nithin Kamath,
I have a query on below describe strategy:
What will be the minimum account balance required for initiate this trade tomorrow (normal Order).
Do, I need to place BUY order first as I don’t have account balance required for “total margin” SELL order?
yes you will have to place buy order first, wait for it to execute to place your other order. You will get margin benefit only once both the positions are taken.
Hi Mr Nithin Kamath,
Our company is in need of consultation in the filed of span methodology – to be used for option trading risk management.
So it will be appreciated to inform us if such services are available by your company .
Thanks.
No Samaneh, we don’t offer any such consultancy currently.
Hi Nithin,
I know the lot size is increasing from November to 75. But has the margin requirement for writing options also increased? The Span calculator is showing that writing one 7000PE for November expiry will require Rs. 50,756. I would have thought that the margin required would simply triple from before, but this shows that the margin requirement has almost quadrupled.
Abhishek
Checking on the SPAN calculator, it seems to be showing wrong.
The Span calculator is not working. Pls fix it.
Harshit, after midnight we will be running our back end process when the SPAN calculator might be down.
Hi. I want to sell the nifty call option for strike 9000 date DEC 2016. Repeat DEC 2016. Pls let me know what would be the margin? Ur margin calculator does not seem to have this option.
Ah yeah, long dated options are currently not showing up. One of those things u can do currently is to place a limit pending order, and see what is the margin that will get blocked in cash positions.
sir, bank nifty option , strike rate 17000 call and put and nifty stike 7800 call and put –sell option for both and the carry overnight, please tell me the approximate the the margin money required.
sir i am layman, so please tell me in figures..i dont understand your calculator.
tell me approximate +- figure .
waiting
Around 72000 for Banknifty and 80000 for Nifty. Surprising that you are not able to figure out the calculator
Click here to check the breakeven point.
Hi Nithin,
When i hold stock of a company “ABC” and i want to write a call of the same company, since this is covered call would i get any margin benefit
You could pledge the shares in your holding and raise margin which you could then use to write the options.
Dear Nithin,
is there difference in margin for selling options for same strike but different expires.
Attached snap shop from calculator.
Please help me understand how exposure margin is calculated.
Thanks.
Yes, the margin goes up the longer the time to expiry. The far month options usually have much more exposure margin. Check this link, point 16.
For futures on individual securities and sell positions in options on individual
securities, the exposure margin is higher of 5% or 1.5 standard deviation of the
LN returns of the security (in the underlying cash market) over the last 6 months
period and is applied on the notional value of position.
I have selected put and call option for the same series with the same expiry and it is showing the complete margin without any margin benefit . As an example – 8000 CE and PE for Feb series shows margin of Rs. 2.10 Lacs while RKSV site shows the margin for 98K. Request you to look into this.
FROM TODAY SPAN CALCULATER NOT WORKS ,MAYBE SYMBOL SELECTION TAG NOT WORKING,PLEASE CORRECT IT
Which scrip’s margins are you looking up for? Seems to work fine.
Dear Nitin ,
If i trade in Futures only , what margin is applicable in MIS Intraday .
span margin or exposure margin or sum total of both ?
chandru
If you are using MIS then 40% of SPAN + exposure.
Hello Team,
I am not able to calculate the margin for same month expiry options in SPAN calC.
http://zerodha.com/z-connect/queries/stock-and-fo-queries/zerodha-span-calculator
e.g.
BUY CE 7900 28-JAN-16
SELL CE 8100 28-JAN-16.
When I enter second one , first row is getting deleted. (If expiry month is different, then it is allowing).
Please correct the same.
Thanks
Siva
Can you add the Short position first to the SPAN calculator and then add buy option (instead of first entering the buy option). Will have this checked.
Thanks Nitin. Its working fine, if I go with sell first, still Buy first problem exists.
We’ll have it checked and fixed.
HI Nitin,
I am not able to put the below order.
Using Margin Calculator for below orders, it is showing Total Margin: 23958 and Margin Benefit: 25526.
NIFTY Jan16 7700 SELL
NIFTY Jan16 7500 BUY
I am having 60k in amount, definitely more than above combined.
But,, when I am placing the orders in Kite, after placing first order, second order is getting failed with below reason, tried vice-versa, same error.
STATUS MESSAGE
RMS:Margin Exceeds,Required:73908.41, Available:60385.88 for entity account-DS5132 across exchange across segment across product
Hello nitinjisir,
Today I have place 3L spread order nifty fut Jan buy ,sell nifty jan ce 7600,buy nifty Jan pe7800( giving manual price near around current price at that time),span calculator shows total margin around 54k,but when I place that order it gets rejected even though I have 69k,dying that margins require91k..why is it so..is it not enough to have total margin money or if it is required total margin and benefit together at the time of spread order 3L..
Niket, you get the margin benefit only once all the three positions are entered into. So you will need sufficient margin to enter these individually.
Thank u nitinji.I would also like to know when it gets automatically square off in spread order.does i am able to know when spread orders gets square off.does exposure margin plays vital role in such situations??
If you have a calendar spread in futures, nothing will be squared off unless one of the contracts expire.
thank u,when i put 3L order why the message below gets. System could not complete your transaction- ADMIN notified
even i have sufficient cash,is there any technical problem or i have put wrong method.buy nifty jan fut,buy nifty pe ITM,sell nifty CE OTM.
16418 : Order with Invalid attributes rejected by the system VKSPL-EQ
This is a rejection code directly from the exchange. It means that you’ve placed the order at a price or time or quantity which isn’t approved.
1. Illiquid scrips in the Periodic Call Auction trade in hourly cycles, starting at 9:30. So from 9:30 to 10:15 (45 minutes) you can place orders. The exchange matches orders from 10:15 to 10:23 (8 minutes). Then there is a cool off time from 10:23 to :10:30 (7 minutes). This cycle is repeated 6 times during the day.
2. Once you place your orders, you have to wait until the 45th minute for the exchange to start the execution process. Orders will be matched on price/time priority like always.
3. If your order is not matched in a session, it will get cancelled and you have to place a fresh order again.
The margin benefit option is not working when you put in the money + out of money option combination, please check and rectify
dear sir
Please explain the margin required in Stock option
eg 1-if I buy 1 lot call option HDFCbank jan strick price 1040ce at 12.30 when(hdfc price is 1038) then what is margin reqired . is that 12.30*500=6150 required or more
2-if I buy 1 lot put option of cairn india of 100PE at 0.15 when ( cairn india price 117) then what is margin reqired . is that 0.15*3000 = 450 required or more
please explain
When you buy an option, margin required will always be: Lot Size * Premium payable. Your margin computation for both HDFC Bank and Cairn India is accurate.
I would like to know whether the requirement of 50% margin in cash and 50% by way of collateral is NSE/SEBI requirement or it is Zerodha requirement? This is with reference Zerodha communication dated 25th Jan 2016
It is SEBI requirement, check this: http://tradingqna.com/29334/pledge-stocks-margin-trade-will-interest-charge-calculated.
Hi Nithin,
Today I am trying to place 3 leg order. As per span calculator ,Rs. 36000 is required. But although I have maintain 40000 in account, order is rejected due to higher amount is required. Please not, my buy order is already executed.
Thanks,
Shibashis
Dear Nitin,
I have read your story and your vision related to brokerage and new trading tools.
I become marketing partner with you and also open my account with you to check your services before moving my client to Zerodha but i am not happy with you support team which is not working with your vision.
Following are the pain points:
1. I have moved my account to NSE Now but support team not added bank account and after follow up with them 4 to 5 time they move me to kite again but while mean time i can add money and due to 5 day delay form your side they square off my positions which is not my fault, i am ready to pay but they not given me any portal.
2. Current issue i have USD short in my account with SPAN + EXPOSURE margin. one day before i have positive cash but due to market movement in the middle of day my cash is reduce to -900.00 mean total of SPAN margin and EXPOSURE margin is less by Rs.1000.
as per my understanding if MTM is there than it may adjusted with exposure margin for the day and person can add money next day but with out my knowledge your support team square off my positions in middle of day only for Rs.900 even i have full SPAN and Exposure margin.
I need clarification on this matter. i discussed with support team but no satisfactory answer received. also they are not giving any response.
Regards
Anoop Gadia
1. Hmm.. on Now the payment gateway is available only for Axis and HDFC. You will have to do NEFT/IMPS if you have other banks.
2. Any MTM losses below the SPAN+Exposure has to be met the same day. Exchanges block the entire SPAN +Exposure all the time from the broker. If margin in the account goes below SPAN on eod, exchanges even charge a penalty. Typically we don’t auto square off positions if margin in your account is above the minimum SPAN required. If your account balance drops by 60 to 70% from what is the money required for holding the position intraday, it will be auto squared off.
Nitin,
My margin not gone below 60% its just 1000 less than total for same day. for that i can add money next day.
Please check the matter.
Thanks for your replay.
Send all account specific queries to [email protected] with your client ID.
You Span margin calculator tool is excellent. I have some query in it. Can I upload Position in Excel and calculate total margin? Can it be possible to include Equity.
There is no margin in case of equity trades. Currently not possible to enter positions using Excel.
No, upload option isn’t available. SPAN is used to measure the margins required for trading in the F&O segment only.
Equities margin: You can calculate here: https://zerodha.com/margin-calculator/Equity/
Hi Nitin,
I wanted to know the margin amount required for “intra day” trade for Nifty or Bank Nifty option writing.
Thank you,
Nifty Options margin for Intraday trading:
Scrip: NIFTY 25-Feb-2016 7100 CE costing 121/- each.
Pre-condition: Say I have 1,00,000/- as cash position and there are no orders placed.
How much max quantity I can buy in such scenario, and pl keep in mind I will be squaring off the position at end of day as well so that I will not be breaching the margins. Pl note I will always be buying CE or PE as first order and then squaring off before EOD, so no short-sell Nifty option order.
How I wish that Pi software does this square off automatically at user given time say I want to square off all pending orders @ 15:27 hrs or say 15:28 hrs but for sure before 15:29 hrs as volume/liquidity dips around that time.
Each lot will cost you 121*75 = 9075. So with a lac you can buy upto 11 lots. You can set the order type as MIS (for it to get squared off at 3.20 pm) or NRML (to carry forward the position to the next day). Time based orders aren’t available yet.
Hi Nithin,
If i write an option, should i need to keep the total margin in the account? And if i can keep the total margin can i hold the shortsell position for 25-30 days?
e.g. if i want to sell/write 1lot nifty 31st March 7400CE on 25th Feb keeping the total margin (37400 INR using the SPAN calculator) can i hold it for 25-30 days and buy it on the 4th week of March?
What if there is no Open interest for that lot at that point of time?
Yes, you need to keep total margin, and yes you can keep it till expiry. If you have entered the contract, it means there is OI. While exiting, if there is no liquidity, it is just let expire.
Hi Nithin,
Thanks for your quick response.
I have another question. If i don’t have the margin but try to write an option, will the system block the transaction or a penalty will be incurred for that?
Ideally the system will not allow you to place the order in case you’re short of margins. In case it does, the onus of maintaining enough margins vests on you, failing which penalty will be levied for the deficit margin.
For this Iron Condor, The Max Risk is 15000. Why is zerodha charging very high margin. Could you please provide better margin for such trades. This would give better ROI for traders.
Thanks
The margin to be blocked is determined by the exchange and not us. Check this link: http://tradingqna.com/949/span-margin-for-a-hedged-postion
Hello,
Please clarify me that if I buy 10 Lots of XYZ @ Rs. 5. in one order.
and one lot purchased at 9.30 am, one at 9.40 am, one 9.50 am so & so.
then will the brokrage be same at Rs. 20/- flat ? order something else ?
Yes, it’ll remain at Rs.20 will all the 10 lots get executed.
sir, if I trade through MIS or intraday same margin are required as positional trade.. if margin required for intaday as positional trade … so what the use of that 40% leverage amount….please clarify…
t
You get additional leverage for trading using MIS. Assume 1 lot of Nifty requires 40k using NRML(positional), using intraday you will need only 40% of this whcih is Rs 16k.
some times span calculator does not work. I’ve a screen shot to show this..Not able to attach here.
tarak
what time are you trying to check this? I am guessing if you are trying when there beginning of day process is running, then you will not be able to.
Hi.
Do you think we have the provision to lower the margins for credit spreads in India? For instance
As on May 3, 2016, I sell infy 1240 call at 10.5 and buy infy 1260 call at 7.3.
My net credit is Rs. 3.2, and maximum loss is (1260-1240) + 3.2 = Approx 17. So with 500 lot size my maximum loss is Rs. 8500. So margin required should be around 8500. But its showing 76000 when i check on zerodha span?
Thanks & Regards
This margin requirement is stipulated by the exchange. Check this: http://tradingqna.com/949/span-margin-for-a-hedged-postion
Hi, suppose i have bought a call of nifty 8000 at 25 and at the end of the day premium falls to 20 but i want to
take overnight position. Will this 5 rs be adjusted at the end of the day.
Yes, the value will drop by Rs 5.
NSE FO. MARGINS ARE DIFFRENT FOR T+0 AND T+1 ? CAN CLARIFY
It is the same.
zerodha… provide 5day margin for stock trading…
Why is there no option to calculate Span Margin for BN wekly options?
It will take some more days to start showing up.
Same request here , please Add Bank Nifty Weekly Options
Banknifty weekly already on MIS
Hi Nitin,
I am trying to place the below order from the Kite, 20 lots.
long Nifty Jun 7800 PE
short Nifty Jun 7900 PE
Even if there is no margin the maximum loss for this position shouldn’t exceed 1.5L but my sell order is getting rejected saying Margin required is 7+lakh. Same is being shown in the Margin Calculator tool, why is it so?
These are exchange requirements, check this answer: http://tradingqna.com/949/span-margin-for-a-hedged-postion
Dear Nithin,
I want to trade in BNF weekly expiry Options.
You have not yet enabled MIS Option selling, and intraday margin benefit is also not there. When are you enabling the Intraday margin for the same?
We’ve enabled MIS trading with Intraday margin benefit already for Weekly options.
Nitin,
Currently the margin showcased is based on current prices. Can you incorporate (a approximation if necessary) a What If Analysis where I know the margin based on if Nifty moves say 100 / 200 points either way (this becomes useful in strategies such as Straddle / Strangle where one leg can first become At the Money and then Out the Money unless its adjusted).
Thanks
Little tricky because the margin calculation also involves volatility calculation. Calculating future volatility is as good as calling direction in the market. 🙂
am new to trading on PI. where can i check margin requirement before placing order. Do i always need to go on webpage ‘margin calculator’ or it can be quickly checked on pi itself?
Currently only on the webpage.
I’m a newbie into all this options trading. Even so, if the margins for an option spread are THIS high, it defeats the purpose of the spread. Forcing the traders to play singles? I dunno, but sir, can your community not push for a better scenario. Across the world margins are half of the actual position. Here its at least thrice the position!
Prithvi, margin requirements are regulated by exchanges. Exchanges charge margin based on worst possible scenario.
Of course sir, I have read a few other queries posted above, so yes, the margins are decided by the exchanges. I wasn’t questioning your motives sir. If anything I’m a fan of the transparency you guys provide, which is why I requested if your community (either Zerodha or the entire brokerage domain) might be able to fix the scenario. It may not happen any time soon, but I plan on trading for a while 🙂
PS : Sorry if my previous query was obscure.
How do I calculate the margin requirement for BANKNIFTY weekly expiry contracts? I could find only the near, next and far term contracts in the F&O margin calculator. Also, how do I calculate the margin required for long-dated NIFTY options?
Banknifty weekly margin requirements are similar to the monthly. Similar for long date Nifty options, slightly higher than the monthly.
Still, we need margin calculator for BankNifty weekly. Other brokers are providing the same.
Haresh, the margin requirements for weekly and monthly options are similar, please refer to the margins for the monthly options.
I was trying to calculate the SPAN margin based on the rules stated on the exchange website for the following two cases , and I wasn’t able to tie out with the above calculator :
1) Short ATM call + Long future (same expiry) : Risk-wise this is the same as an ATM put, so am not sure why the SPAN margin changes at all. I understand there is execution risk, but I see nothing on the exchange website to account for this?
2) Short ATM call + Short ATM put : Technically the risk for any one shock does not increase when we go from a short call to a short straddle. So SPAN margin as per the calculation rules on the website should not change. But I read what you wrote elsewhere about execution risk, so I agree the SPAN should be higher. Just don’t see the rules to take care of this
Any light you can shed will be much appreciated 🙂
Check this Adithya: http://tradingqna.com/949/span-margin-for-a-hedged-postion
Thanks Nithin, I did read that before posting the original question. I understand that there is execution risk and that is why the margin benefit may not be as high as one would anticipate.
But do you know the exact rules whereby we can calculate the margin benefit for different portfolios? The SPAN rules (https://www.nseindia.com/products/content/derivatives/equities/nsccl_span.htm) do not talk about execution risk, and if you blindly follow those rules, you get the same SPAN margin for a short call position as a short straddle position. I was trying to build those rules into a system for picking option positions, and hence the question.
Adithya, the margin blocked for a particular client is completely determined by the exchange. The SPAN calculator predicts it upto 90% accuracy. But yes, the only reference is the link that you have shared.
I HAVE USED MARGIN CALCULATOR BUT DID NOT RESPONSE PLEASE GUIDE, NIFTY SEPT-16 (8950) (75LOTSIZE) CE
For writing you need 47000,working fine.
THANKS FOR REPLY AND MAIL
SIR I WANT TO CALCULATE MY SELF IN RUNNING MKT. HOURS.
TILL TO DAY MARGIN CALCULATOR DOES NOT WORK, THERE IS A PROBLEM IN IT OTHERWISE MY MISTAKE,WHICH EVER FROM BOTH PLEASE SOLVE AND GUIDE ME.
Margin calculator works fine, but it can’t show you exact margin, there could be a + or – 10% variance based on how volatile the market was today.
jay shri krishna
thanks for reply,
IN MARGIN CALCULATOR PROBLEM IS NOT ACCURACY BUT IT DOES NOT WORK.
BRACKET ORDER MARGIN CALCULATOR SHOWS PERFECTLY, BUT F&O MARGIN CALCULATOR DOES NOT CALCULATE CALL OPTION MARGIN
Dipesh, when you are buying options there is no concept of margin. In options it is a premium amount, whatever is the premium, you have to keep it in your account.
Do i get margin benefits? if i am holding the underlying security in my demat?
Example:
Demat holding: 1000 Cipla
Future sell: 1000 Cipla
how much margin i need to pay?
Check this post.
I want to buy OCT 2016 Reliance futures at CMP – 1100 for which your margin calculator says the Initial Margin(IM) is Rs 41000, Exposure Margin(EM) is 27000 and hence the Total Margin Requirement is Rs 68000 (IM + EM), I have a question. Does the above mean, that I need to block 68000 to execute the trade? secondly, if I block 68000 and execute the trade, and carry it overnight (NRML), what will be my total loss in case of market crash – will it be 41000 (assuming Reliance, having a lot size of 500 goes down by Rs 82 on its opening) or the full 68000?
Yes 68000 required and your loss will Rs 41000 (500 x 82)
Thanks. So you mean if Reliance falls even by Rs 100 or 200, my loss will be equal to the initial margin i.e 41000 and no money is pulled from my Exposure margin of 27000 which stays intact?
If reliance falls by Rs 100, you will lose Rs 50000 (500 x 100) and Rs 1lk if by Rs 200. When you lose money, first exposure margin reduces and then SPAN.
I am interested in options that is selling ( equity and nifty and Bank nifty,but not the indexes) Regarding calculation of margin I tried your with your calculator. I cant understand what is Span margin, Exposure margin and Total margin. Which one of these amount I should have in my account for carrying on option that is selling equity and Nifty and Bank nifty options and not index trading. Pl. clarify.
You need total margin.
what would be the margin requirement for box spread with below price?
long 8300 CE @ 570.05,
Short 9200 CE @ 1.35
long 9200 PE @ 324
Short 8300 PE @ 1.6
Qty is 100 or 1 for example
thanks
Around 79k, Check this: https://zerodha.com/margin-calculator/SPAN/
Suppose MTM loss is more than free cash allocated (say by 5 %) in middle of the day…..and at the same time margin due to collateral is available much more than the MTM losses…. & there is no MTM loss at the end of the day. Will the position be sqauared on auto?
In other case, suppose MTM loss is more than free cash allocated at the end of the day…..and at the same time margin due to collateral is available much more than the MTM losses….what will happen…shall I be given time (how much) to transfer funds for MTM loss.
Yes, as long as there is collateral that is pledged to cover, you will be given time. Check this post.
thank you…
colateral amount after hair cut can be utilized as margin for overnight future and option positions.
no interest charges…even if cash is not given &
EOD MTM PAID WITH FREE CASH..
M I right SIR
No, Read through this post.
Hello,
I usually trade on a intraday future basis.
Tha margin calculator is for a one month expiry.
If i want to trade on intraday basis do i get better explosure and less blocked margin.
I usually trade nifty around 10-15 times in a day with lot size of 50 to 80. Please let me the know the best solution.
hello sir,
when I m am trying to use options product for particular script its not showing any combined margin requirements for call and put option. so kindly please let me know what I am doing wrong.
when I try to see futures combined margin requirements its getting displayed.
Regards,
imran
There’s no reason for it to not show. Can I know what options you’re trying to add?
this is is how its showing below well sorry there is no option to post the screenshot here.
if am trying to buy the script I m illustrating it.
Exchange
NFO
Product
Futures Options
symbol
reliance 27-oct-16
option type
calls
strike price
1120
net quantity
500
then I am trying to add
down I m choosing buy option
below last displayed msg is this
NFO x
RELIANCE16OCT Options 1120 CE 500 B N/A N/A N/A
I think you’re trying to calculate margins to buy options. When you buy options the margin requirement will always be equal to Premium*Lot Size. SO if the premium for 1120 CE is Rs.18/- the margin required will be 9000 (500*18).
You can use the margin calculator to compute margins to short options. Select the Sell option instead of buy.
well query is solved thx for the help.
Please include Bank Nifty weekly options in your symbol list. Also provide MIS and Normal margin calculation option in FNO margin calculator.
MIS margins are already being given for weekly options.
The margins will be around the same as what’s required for monthly contracts.
how i can check the Margin for Bank Nifty weekly selling- the call option?.. in Zerodha margin calculator under the contract drop down the weekly contact is not sowing. Please help me on this..
Hi, What will be the margin required for selling premium/options on Intraday any additional leverage if We traded with Bracket-order or MIS?
Use this calculator to see the margin required: https://zerodha.com/margin-calculator/SPAN/. For intraday 40% of overnight margins.
Hi,
When will be the premium will be credited on call writing and how do you calculate the margin benefit
Regards
Raju
Premium is credited next trading day. You can calculate margin benefit here: https://zerodha.com/margin-calculator/SPAN/
sir case market me nse par margin nh h kya
Hai, intraday only though.
Hi – Please add weekly bank nifty maturities in margin calculator. Thanks
Say I have sold puts Dec 29, 2016 on SBIN, I got 750 INR. My total margin required : 105120. Strike is 200.
Q1. If stock moves towards 200, the put value will increase. Now, if stock stops at say, 225 on 29th Dec. So, I will get full 750 right?
Q2. What happens if stock ends at 199. That means I have to buy 3000 shares of SBI at 200, but my account does not have that money. So, how much money I loose. Is it the money = diff(put option at that time – the put option value I sold now)?
Q3. If by some glitch, stock drops to 190 overnight for even say one minute, now, If I get exercised, what happens?
hi nithin,
its ok if you don’t add weekly options. but please confirm if there will be a margin benefit if long on weekly banknifty and short on monthly.
No margin benefit in this case.
Hello,
I am trying to BUY SUNPHARMA-17JAN future (1 lot, NRML position…not MIS) and as per margin calculator total margin required is appx 64k, however, when I placed the order it was rejected for reason that margin is insufficient.
Does anybody knows what’s wrong here?
here is exact text for rejection –
ORDER TYPE – LIMIT
PRODUCT / VALIDITY – NRML / DAY
TIME – 2016-12-05 09:49:04
STATUS – REJECTED
STATUS MESSAGE – rms:margin exceeds,required:122547.50, available:89693.24 for entity account-?????? across exchange across segment across product
Never mind, I figured out what’s happening and also fixed it.
I had earlier placed equity buy (limit) order worth 60k thereby reducing cash available for margin to 29k (89k my cash available – 60k blocked for equity order), so as soon as I cancelled the equity buy order, I could place future buy order successfully that required around 63k margin.
Best to send such account specific queries to [email protected]. I am guessing you might have another pending order which is blocking margin.
Hey I am new to market. I bought the commodity ALUMINI17JANFUT @ 117.75 on november 30 as NRML. First i credited the amount 10k to the commodity account and bought it so my balance after call was 4653. But on next day, i got the reversal amount and also was debited an obligation amount (loss) and also a new margin amount was debited. So i get a new low balance and this happened every three day. I didn’t sell the call anytime. May i know what is this? And everday a new margin amount is debited and if i make a loss in a day my balance is reducing. Can you explain this?
Abhimanyu, all futures are marked to market everyday. So essentially margin blocked for futures is reversed, any profit or loss for the day is credited/debited (today LTP vs yesterday LTP) and then margin blocked again. Suggest you to go through F&O module here: http://zerodha.com/varsity/
Hi sir,
In options when we are entering into a position ,what is the amount we have to pay whether it is the strike price or the premium and where shall we find the premium amount for a particular strike price.help me on this
When buying options, you need premium amount. So if lot size is 100 and premium is 10, u need Rs 1000. If you are shorting options (selling first) you need a margin amount since the losses are unlimited. I’d suggest you to read through both futures and options module here: http://zerodha.com/varsity/
If i have 10000/- rs in my account can i brought one nifty lot at zerodha……
around 47k is required to buy it for next day, 25% of this will be required if trading for intraday using Bracket order or cover order. around minimum 12500
Is this your margin calculator working correctly? i have input to buy one nifty put of 7000 and it is saying 48000/- margin.
Also let me know how much margin you are charging for shorting nifty options
Number three i want to know how much margin you are charging for Nifty buying and selling?
I only trade in Nifty.
And other traders are giving to trade for just 30000/- margin money, whereas your software is saying 48000/-
Also clear how much margin you are giving for intraday and how much for delivery in cash segment ?
Many brokers are giving 20 times intraday and 10 times delivery for 7 days carry over.
I want to know the above details.
thanks,
investor and trader both.
When you buy options, margins are charged by way of premium that you pay towards the option. 7000 CE currently is trading at 900 Rs. Lot size being 75, total margin required will be 67500.
Margins for shorting options would depend on the contract you’re shorting. Please use the calculator to ascertain the margin: https://zerodha.com/margin-calculator/SPAN/
As of 29.12.2016, margins for trading 1 lot of Nifty Futures for Overnight = 48000, for Intraday roughly 20,000.
Equity margin for Intraday: https://zerodha.com/margin-calculator/Equity/
No margin for Equity deliveyr yet.
Hello ,
i have some query doubt on wring/short stock option call
can write any month of expiry call like
now its month of jan and i have write/short call of march is it possible
and how much margin required for write this call
Yes, you can write as long as you have the required margins in your account. You can ascertain margins here: https://zerodha.com/margin-calculator/SPAN/
I checked for margin blocking for writing Bharti Infratel 360 call. Margin calculator is showing only span margin and zero exposure margin. But if I choose hdfc 1260 call writing it’s showing both span and exposure margin. How it’s possible. Can I get list of all option contracts where no exposure margin is required.
Deepak, I am seeing both SPAN and exposure for infratel, can you double check.
Thx Nitin. But it’s strange yesterday it was not showing. Would have pasted screenshot if there’s option. But it’s clear now.
Hi Team,
I use the F&O margin calculator to know the premium that I can get while selling options. Since the lower widget doesn’t shows the premium but only the margin amount, I have to rely on the right-side widget to know it. But it becomes tedious when I enter more than 3-4 options as I have to back-calculate everything.
Now when I press the reset button, it resets it back to the original and I have to select all the way back, thus becoming inefficient as it consumes a lot of time.
Could you please look into the following features so that the calculator becomes more efficient in working:
1. Reset button to set the values to zero of quantity and price and not product/symbol
2. The widget lower than this calculator should show the premium received for each individual option apart from the margin requirements.
Looking forward for your response
Regards,
Aayush Chelawat
1. Little tricky
2. Will try getting this done.
Thanks a lot Nithin Sir 🙂
Hi,
Why is the margin calculator not considering the LTP? For ex, shorting 1 lot of SBI25JANCE260, the margin amount calculator takes previous day i.e. Thursday close of 2.6 as against LTP friday .65.
Umesh, the SPAN calculator currently is picking up LTP from our end of day database. We will see how we can make this live.
Hi Nitin ,
I am very new to Options and have a very fundamental question .
I did not understand what is SPAN and What is Exposure in the margin calculator . Not able to correlate.
SPAN and exposure are required only when shorting options. No one line answer to this, suggest you to go through the option module on Varsity.
Hi Nithin ,
Is there any plan to add Ichimoku indicator in Pi in near future ?
I saw some posts from 2015 April here , where it was requested.
Thanks,
Saiful
Ah.. it will take some time, some other bits on top of the priority list .Btw, it is available on our web app kite.zerodha.com
Hi,
In margin calculator “MIS” option not given (BO and CO are present)
how much margin required if One Long Position is in Nifty but One SL order and Target order are open ?
how to calculate this !
thank you
You can see MIS here :https://zerodha.com/margin-calculator/Futures/. Also on SPAN calculator, MIS margin is usually 40% of total margin. No extra margin required if you have a long position to place SL/target order. Check this video.
Thank you sir
very nice video
Hello,
From where to calculate margin requirement for bank nifty weekly options?
In Zerodha margin calculator only monthly options are available.
Thanks
Swapnil
Yeah, will take some time to show up there. But you can assume the margin requirements are almost exactly similar to monthly banknifty options.
Hi, If I have a lot of petronet futures bought at 380 expiry of 23rd feb 2017 and sold a lot of 400 Call @ Rs.6/- what would be my net margin obligation.
You can calculate this yourself using our SPAN calculator.
Span Calculate not showing Option prices and its margin requirements, Please correct it.
Seems to be working correctly. If you are trying to find margins for buying options, it won’t show because buying options doesn’t have a margin requirement. You will need 100% of premium value to buy it.
HOW MUCH MARGIN IS REQUIRED FOR SHORT SELLING INDEX OPTIONS INTRADAY BY USING MIS INSTEAD OF NRML??? MARGIN REQUIRED FOR SHORT SELLING BANK NIFTY OPTIONS IS AROUND 50,000 PER LOT FOR NRML INTRADAY ORDER BUT IF I USE MIS INSTEAD OF NRML THEN MARGIN REQUIRE 20,000 PER ORDER (40% OF NRML) OR MARGIN REQUIREMENT STILL REMAINS THE SAME AROUND 50,000????
Margin requirement will be 20k, but all MIS positions will get squared off before end of day.
Hey Nitin!
Can you please explain Span & exposure Margins calculations with simple example. How do exchanges calculate it.
SPAN is a trademarked product by CME. NSE has licensed this out from CME. You can check this link on SPAN methodology. Exposure margin is charged over SPAN by NSE to give some leeway in case of MTM losses of clients.
Thanks for the reply, that’s pretty informative.
Would you be so kind to help me out understanding the scenario:
I”m new to options shorting. Would like to know about, when the positions could be squared off. Is it like the way we do when we buy options (any time square off)? Is it also possible to write options on the day before options expiry?
Request you to please refer me some pdf to understand it better. I’ve been to varsity on the same. Need insights to practical approach.
Can you check this post.
Sir, my query is whether sbi n5 or n6 series bond traded on nse can be given as margin for FO trades for intial and span margins??
Dear Sir,
I bought one lot of HIND ZINC Mar.Fut.for which I paid margins as per your norms,later I bought 5 lots of Call option of the same stock @avg.price of Rs.1.99. When total premium is already paid in advance,I am unable to under stand why too much margins are being blocked by RMS.
I will be highly obliged,if explained reason behind it.
With regards,
Rajkishore Gandhi.
Client ID DR 6991
Margin requirements are actually determined by the exchanges. If you have bought futures and calls, the risk goes up and hence exchange starts blocking more margins.
Thanks for your prompt response,but I am not satisfied with your reply.I have an account with ICICI DIRECT too and did the same practice,but no additional margins blocked. Though I have a very little knowledge in this matter but whatever I read in your Zerodha varsity I believe that my risk is limited if I am a buyer of call options then what is the justification of blocking more margins.
We are having 3 accounts with Zerodha,in the name of other family members and trust that you are the best broker among the available lots,but regarding margins it is a concern.
Hope you will look again in the matter,and may be able to provide better solution.
With high regards,
Rajkishore Gandhi.
Raj, this margin blocked is absolutely out of our control.If you took the exact same position, you would see that margin blocked will be the same. That is because exchange blocks this.
Dear Nitin,
I trust you people have adequate knowledge on the subject,but still I request you to please have a thorough look in to the matter again, there must be some flaw.I am unable to understand, how exchange can set double standard for two different brokers?
Hope you mat not take it otherwise and explain me in detail.
With due regards,
Rajkishore Gandhi.
Dear friends,
I am still waiting for reply.
With Regards,
Rajkishore Gandhi.
Dear Sirs,
Should I hope to know the correct answer,or forget.
With regards,
Rajkishore Gandhi.
As Nithin’s said, margins are computed on a portfolio basis by the Exchanges using the SPAN (standardized portfolio analysis of risk) software. We don’t determine the margins, the Exchange do, so there’s little that we can do to help you.
Res Sir, today dated 01/04/2017 I was checking the required margin money for Monday’s trading, but there were shows only Span margin not Exposure margin, is it changed? from now we can trade with Span margin only?
Thanks.
I noticed there is no exposure margin for options writing on the index for example. Is that accurate?
Ah, think the backend team is running some maintenance work. There should be exposure margin.
Sir, may you allow to trade with only span margin? many brokers are allowed to their clints.
My problems is I have purchases a future position say HAVELLS at 590 and stop loss at 581. I have paid margin as per your margin calculator. Actually it is blocked at those rates. Now at the end of the day the price of future is 589, stop loss is not hit.
What will be the status of this position. Whether it will be carried next day or will be squared by the RMS at the end of the day.
Depends on the product type you’ve chosen while placing the order, have given an explanation to your other query.
Please let me know the margin required to trade one lot of nifty futures , one lot of bank nifty futures,call option selling a lot,call option buying a lot,put option selling a lot,put option buying a lot .All the trades done for intraday. you can substantiate by giving examples
You can use the margin calculator to compute the margin requirements: https://zerodha.com/margin-calculator/SPAN/
For Intraday, you’ll need 40% of the overnight margins as shown on the calculator.
Either it does not work or language confusing. If today I want to Jain Irrigation 1 lot 105 CE total margin requirements not displayed.
what is margin benefit in margin calculator, which is appearing in green.
When you take positions that hedge each other, margin required drops. This reduction of margin is the margin benefit.
Hi,
Can you please help me out.
I have 300 NIFTY Put options. Why am I required to have a margin when I am trying to close my position? I didnt face this when I made the same trade for the call options I had.
I am guessing you had a pending sell order. Hence new order was taking as a fresh position.
I want short nifty 9500 call & put also around 10 lot .means 750 call& 750 put month of december 2017 expiry…@ total primium 750. So i receved rs.562000 something.
What is the total amount paid by me for margin.
Thanks
You can check the SPAN calculator: https://zerodha.com/margin-calculator/SPAN/. Margin for long dated options will typically be almost 50% more. The SPAN calculator supports margin calculation only upto 3 months duration option.
what is the margin required in intraday nifty option selling
40% of whatever is required for overnight, you can calculate the overnight here: https://zerodha.com/margin-calculator/SPAN/
What is the margin requirement for trading NSE Bond Futures. Asking this bcoz i could not find this on zerodha margin calculator
Check this here: https://zerodha.com/margin-calculator/Currency/
Thanks, I think zerodha is the best discount broker in India.
hi Nithin,
yesterday i shorted 10 lots each of 9600 call and put.
i was charged the margin for 20 lots.
But actually when we short both call and put of same expiry, v should pay the margin for only 10 lots and not 20.
At least this is wht my previous brokers used to do. So why do zerodha charge margin for 20 lots?
Margins are computed using the SPAN method by the Exchanges themselves. When you write options, you’re potentially making unlimited losses, that’s because, let’s assume when the markets move up significantly, your profits in the short put contract will not be enough to cover the losses you make on the short call contract; because when you write options, your profit is limited to the extent of premium collected. This is why higher margins get charged.
I know the risk man..
My question was if motilal oswal, emkay etc charge margin of one lot for shorting one call and put then why r u charging double that margin.
You are trying to be extra safe then.
Tanmay, margin requirements for these positions are determined by the exchange and not broker. So it has to be the same across various brokers, atleast on overnight positions (brokers offer varying intraday margin requirements).
Hi,
Tell be how the margin benefit works when we go for a covered call, do we need to have the full margin benefit or will there be any margin benefit.
Thanks
Bibin
You need to have full margin. You can pledge the stocks and use margin from that to take covered call. Check this post.
Hi,
Is margin benefit available for commodity contracts in mega and mini quantities? I have one Long june17 copper contract and four Shorts in june17 copper Mini Contracts. Your margin calculator puts the margin requirement for this hedged position around Rs.9,000/-. But I an not able to take fresh positions since I get message of inadequate margin though I have funds of around Rs.40,000/- in my account. Can you guide me on this point?
Will reach you on this.
sir,
i tried to sell bank nifty 1 lot of august and buy 1 lot bank nifty july. order not executed, full margin was asked for.
is it so?
To take the position, you need full margin. Once you take the position, margin gets released. Check this.
HI SIR
I want to quires about bank nifty option calculator only for INTRADAY
Exp = IF I BUY 1 LOT OF BANK NIFTY 13 JULY EXP -CALL OR PUT OPTION
AT 220 THAN ZERODHA CALCULATOR SHOW TOTAL COST IS 8829 PRICE IF
GO AT 0 .
THAN MY QUESTION IS
ANY OTHER CHARGES WILL BY TAKE ZERODHA
ITS ONLY I BUY CALL OR PUT ONLY FOR INTRADAY.
THAN CALCULATOR CHARGES SHOW CORRECT or ANY OTHER CHARGES WILL APPLICABLE
PLZ SUGGEST OTHER SOLUTIONS ALSO
Mangesh, stamp duty is not on the calculator. IT has to be calculated separately based on which state you are from. It is mentioned here: http://b.zerodha.com/
Thanks sir,
i am in Maharashtra, so what is total total cost along with stamp duty above example
These are the rates of Stamp duty for the state of Maharashtra:
Stamp duty is Rs 200/crore in Maharashtra. https://zerodha.com/brokerage-calculator has a link to sample contract note. You can add all trades to this contract note and see this yourself.
ID DR2746. For 1200 Nifty Fut of Aug 17, I was asked for Margin of 11,86,004.55. Per lot of 75 Nifty it comes to 74,125.28. Your calculater shows margin required as 60,657. Pl. check & rectify.
You might have placed another order which is blocking margin?
hi sir, i am using spread orders
i want to
buy 2 lot atm banknifty calls (weekly)
buy 2 lot atm banknifty puts (weekly)
sell 2 lot otm banknifty puts (weekly)
sell 2 lot otm banknifty calls (weekly)
my accout size is 160000 how can i get margin on spread orders (NARMAL ORDERS NOT MIS)
Margin benefit you get on short options. So as soon as you place a buy option that is hedging the short option, the margin required drops automatically. You don’t have to do anything special. You can check the margins by simulating this position here: https://zerodha.com/margin-calculator/SPAN/. There is no weekly, but margins on monthly is very similar to weekly.
Karnataka Stamp duty….ooo1% For Crudeoil but zerodha brokerage calucalator showing 0003…,,,Taxn charges…showing…also More…………
Earlier, the rate of Stamp duty was 0.01% subject to a maximum of Rs.50 per contract note. The Govt. has revised the rate and the new rate is 0.003% with no cap on the upside.
Ok..so this would seem very amateurish but I am kinda new and learning…so please forgive me.
Just wanted to know when we do intraday trading using MIS we are given more leverage by Zerodha which in turn enables us to trade with more volume of shares. Now when we square off our positions, how much of the profit earned, is deducted by Zerodha i.e. apart from the brokerage?
e.g. I have Rs. 50/- in my account. I get another 50 from Zerodha as MIS leverage. Now with the total of Rs. 100/-, I buy 100 shares of Re. 1/- each. I sell them at Re. 2/- per share (Rs. 200/- total). Profit earned is Rs. 100 (200-100). Now how much would Zerodha deduct from the Rs. 100/- profit earned.
(For the sake of simplicity, let us assume brokerage charges are nil.)
My apologies if this seems silly, but I had to ask. Thanks.
Zerodha doesn’t charge anything for intraday leverage. So you get the entire Rs 100.
Why NIFTY nrml margin is showing 75000, where as I found that it’s in samco 60000. Why this difference?
It is Rs 60,000 – check this: https://zerodha.com/margin-calculator/Futures/
Sir, kya ye margin calculater jo dikhata h zerodha use real me deta h means if a idea share pr vo 7× dikhata h to vo milta hai ya bs simple calculater hi h plz reply…
What you see is what you get. There might be a 10% variation.
Hi Nithin
Re — Nifty and Banknifty Option Selling
F&O Margin Calculator alli 3 lots Banknifty 25000 CE Selling ge Span Margin Rs: 1,00,194 anta thoristaa ide and Total Margin Same Rs: 1,00,194 thoristaa ide….. Exposure Margin Zero anta thoristaa ide.
Enaadru Technical Problem idiya or Exposure Margin Option Selling ge bekaagilva??
ah, looks like some issue. Can you check this tomorrow morning.
Namaskaara Nithin….. Nimma reply ge Dhanyavadagalu.
Eega chk maadide, matte Nifty and Banknifty Option Selling ge Exposure Margin Zero antaane thorisdaa ide.
Span margin and Total required margin Same thorisdaa ide.
It must be showing now. Checking why it wasn’t showing before market.
Hi,
When I try a combination of buying and selling and option there doesn’t seem to be any benefit.
For eg:
Buy Nifty 9900 PE
Sell Nifty 9500 PE
Ideally there should be no margin but it is asking for 45000
Can you please help?
Check this answer.
Hi Nithin,
Can i expect bracket order facility enabled on MCX also?
We haven’t gotten approvals yet.
Hi Nithin,
Thank you for your wonderful services. Since margins are decided by the exchange and varies based on underlying, can you help me find the required percentages for all the equities on NSE? NSE must be providing a spreadsheet but I’m not able to find it on their website.
Thanks.
NSE doesn’t share this with the public. It asks clearing members on exchange to collect this. What you can see here https://zerodha.com/margin-calculator/Futures/ is what exchange asks for.
Hi,
I have a query and would need clarification. Why do we have two different margin calculator for Future contracts for Equities (One being under Equity Future & Other being under NFO) ? Suppose I would like to calculate the margin required for TATAMOTORS future contract, should I use “Equity Margin” calculator or should i use “NFO –> Futures—> TATAMOTORS” ?
You need to use NFO. Equity is for stocks intraday.
Thanks Nithin.
So that means if I would like to buy “RELIANCE 28-SEP-17” for intraday & Overnight I should use “Equity Future Margin” calculator and if I need to buy for CNC or Spread Order I should use “NFO–> Futures” Margin calculator.
Cheers…
CNC is product used for buying stocks. You need 100%. But yes to trade futures you need to use future margin calc. Suggest you to go through this.
When I calculate margin requirement for NIFTY futures. I see your margin calculator is using 5% as span/inital margin. However according to my knowledge span/inital margin for Nifty is 7.1%. Kindly tell me why are you using 5% for as span / initial margin?
Anand, what the SPAN shows n the calculator is what exchange charges.
Hi Nithin,
Weekly Bank Nifty Span calculator is not updated ?
Margins are similar to monthly.
Hi,
Please clarify if for covered calls ( buying shares in cash and selling CE) is there any margin reduction? Thanks
No margin reduction unless you pledge the stock. Check this.
Thank you for the prompt reply.
Premium amount not showing in calculator for options
For short options it is showing. For buy options you may not see it because to buy options you need premium and not margin. SPAN calculator shows only where there is margin required.
HI Sir
If i take overnight short straddle position on Equity shares say
SELL DISH TV OCT 72.5 CALL
SELL DISH TV OCT 72.5 PUT
Should i get any margin benefit for these short positions or the margin will be the sum of individual short positions. please clarify me.
Hey, buying options require full premium and not margin. You can calculate your comprehensive margin requirements here.
Margin amount kitne din me account me add karni hoti hai?
Bhadresh, it’s up to you. 🙂
Zerodha ne koi to rules banaya hoga ki aap itne din me margin amount ka bhugtan nahi karoge to aapko uska penality ya charge ya interes dena padega? Aesa koi to rules hoga? vo mujhe janna hai please help me….
No such rules. You can fund your account anytime you wish to and start trading.
Thank you
Sir mene margin calculator m check kiya.. 1 lot of pnb futures long hedge with1lot of pnb 190put option buy and sell 1lot of pnb 205call….combined margin require 2,26,000 and niche brackets m arha total 3position ka 5,28,000…..to mje trading account m kitna balance maintain krna hoga all 3position k liye…528000 or 226000?
Sir, Can I sell stock option & hold it till expiry?
Eg,
Sell PNB Nov 250CE at 10.60 on 05/11/2017
Buy PNB Nov 250CE at 07.60 on 10/11/2017
Is it possible? 🙂
Priya, yes you can as long as you have the full margins in your account. To calculate your margin requirements you can check out the Zerodha Margin Calculator.
Dear Sir,
Have bought 3 lot future Rec at 175 and at same time bought put 175, 180, and 185 each one lot.. so by calculating the maximum loss is 1.1 lakh for expiry..
Now the price is down by 10% after I bought… Intially I had 4 lakh amount.. now I’m short of margin.. as the loss is compensated in put.. will zerodha square off my position…?? Or will it allow till expiry… ??
Suppose i buy nifty CE 10350 at 80rs. 75 lot.when i sell this option any margin require?
Since you’re just exiting a postion you’re already in, no additional margin is required.
how much is margin require for writing (Selling) nifty call option .
Hey Hitesh, check out zerodha.com/margin-calculator. You can check out the margin requirements yourself.
Hello,
Kindly explain me the margin calculation for shorting the nifty options.
Say the NIFTY Index is 10265 and also NIFTY DEC 10000PE is 41.70Rs.
How to calculate the margin required to short the 1 Lot of 10000PE ( which is at 41.70Rs.)
As per my previous please dont provide me the link of the zerodha margin calculator. I have gone through that and not clear.
Please explain step by step mathematically .
Just check out the margin calculator. The formula for SPAN calculation is proprietary to CME and the exchange has only licensed this from them.
Sir,
I have a small query about margin calculation. As we all know Iron condor is a 4 legged delta neutral strategy. If it were to lose it will lose only on one side. Then why is zerodha asking for margin on both sides of leg? For example, as of today it’s asking 97000 rs for iron condor in nifty, since it has been hedged on other side automatically on entering trade, the proper margin requirement should have been half of that amount ( 50000 rs approx).
When you’re entering the second leg, the system has no way to know how much to block, so it just blocks SPAN + Exposure. Then, you get the margin benefit once the position is open.
Sir, today i.e. on 28/12/2017, I sold call option of RCOM at a strike price Rs.40- for expiry 25/Jan/2018. I have paid Rs. 3,00,000 ( Three lakh ) as margin money and received Premium of Rs.46200- ( 28000 * 1.65 )
If, the stock price further increases, the option premium will also increase and my Margin amount will also increase. If, I pay the Margin amount in full as required by system until expiry date. Is there any chance of Square off my option position by the system before expiry date.
Please clarify.
Thanks
sir
is there any problem in margin calculator site it not showing any margin in fo and cds segment
The margin calculator does not seem to work anymore. Can you confirm?
I am trying to calculate margin for short selling nifty 10600 CE.
Margin calculator for F&O is not working.
Are there any extra charges in using margin for selling options and covering them intraday
Hello, Why BankNifty weekly options data is not provided in margin calculator? For eg. I am checking how much margin needed to short BANKNIFTY 18-Jan-2018 26100 Call but the data itself is not available in margin calculator. Pls suggest!
Margin Calculator not working. Since from longs days there is problem.
Some improvement is required, it would be better if you add weekly banknifty option series.
Should be fine now Vivek. Can you please check?
it always shows NA for options margin. Any issue?
For buying options, you just pay premium x lot size. Hence nothing on the calculator. You can see the margin requirements for shorting though.
At time of selling Options margin required was near about 25000 and free cash in my account was above 30K then also my order was rejected reason being margin exceeded. Also would like to tell you that I was able to buy options worth full value of my free cash.
When I am trying to know the margin requirement for selling options in nifty, calculator is showing only span
it is giving exposure margin as 0 is there any issue?
I got the total margin using this formula.
“Total Margin = Span/initial + Exposure – Spread Benefit(If any)”.
but what is “Spread Benefit” ? and how to calculate it? Is there any formula for this?
Thanks in Advance…!!! 🙂
The margin calculator is not working for calendar spreads from last Friday (09-02-2018). For the second position, it simply shows N/A. Margin benefit is not displayed. Please check.
Sir,
The calculator is not working, [currency futures segment].
What seems to be the issue?
sir
currency margin calculator is not working
What seems to be the issue?
Maybe coming up with an improved version.
its showing NA in currency future segments
I might be wrong but it seems margin calculator is broken. I am trying to find margin requirement for selling NIFTY 10950 CALL and 10400 PUT however margin requirements are shown only for call trade. Is this really the case? I don’t need to keep any margin for shorting puts?
Long positions [buying] in options do not require margin but short positions [writing] require margin.
Having this checked Rohit.
matti sir till now margin calculator is not working properly
Hello Sir,
The margin calculator is not working for calendar spreads from last week. For the 2nd position, it simply shows N/A. Margin benefit is not displayed. Please check.
Thanks in Advance…!!! 🙂
Hi,
I have margin around Rs.5000. I want place an order for pnb. When i calculte the quantity using margin calculator, am getting around 328 qunatity. But as I place bracket order , it is rejecting.
Hi,
I have margin around Rs.5000. I want place an order for pnb. When i calculate the quantity using margin calculator, am getting around 328 quantity. But as I place bracket order , it is rejecting.
Hi Team,
Can you just help me in understanding the concept of Shorting of Call / Put.
Lets Suppose:
Short Nifty 10200-PE: 750 Shares (10 Lot)
As per the Margin Calculator…following are the requirement:
Span: 2,35,875
Exposure Margin: 2,32,940
Premium Receivable: 1,875
Total Margin: 4,68,815
Now after Shorting 750 (10 lots), my margin will be blocked 4,68,815 and I received the premium of 1,875.
Now let’s say…
Current Value of Nifty is 10900
Value of Nifty 10200 PE is 25 (Assume)
After 3 days
Value of Nifty is 10750
Value of Nifty 10200 PE is 40 (Assume)
As per my understanding, I invested 18,750 (750*25) and after 3 days the value of 10 lots (750 shares) will be 30,000 (750*40).
Since I had Shorted the share so my net profit/loss will be: 18,750-30,000 = (-) 11,250 (means loss).
Now can you please help me in understanding the following:
1) Why I need that much huge margin (as per the example, let’s say 25 times margin (4,68,815 / 18,750) in my account to Short the 10200 PE.
2) At what value of nifty (10900 used in example), the whole margin will be squared off.
I am new to trading and will be really thankful to you for helping me out.
It would be great if you will reply via mail.
Regards
I shorted the DHFL mar2018 560 call @20.50, 1 lot on 16/2/2018.
Ever since the scrip has been going south thereby putting me in the profit zone and at close today (6/3/2018) the call I sold is quoted @8.85.
But what I do not understand is the exposure margin asked for by the Exchange goes on increasing every day even though my position is in profit.
Earlier, I used to pay extra margin only if my position is in a loss.
Request you to enlighten me as to how this exposure margin is arrived at.
continuing..
So effectively the Exchange takes from me around 31.2% of the notional position value of INR 75000/- ..ie INR 234000/- ..(82000/- as Span margin and the rest as Exposure margin.) Is this not too very high? And whether this entire span and exposure margin is being held by NSE in their account or is it lying with the broker?
HEllo Sir,
I am suyog jain your zerodha Client.
As i calculate BANK NIFTY option in margin calculator, i am unable to get margin calculation.
Please clarify my query..
Hey Suyog, what exactly is it that you find confusing?
did we increase the margin amount for Futures and commodity. experiencing that zerodha had increased the margin amount for futures and commodity. please confirm
Hey Venkat. The margin requirements are set by the exchanges.
I see that my query on margin of 6/3/18 remains unresponded… Can anyone look into that and respond please..?
Hello Nitin I have a question regarding calculation of margin of Banknifty option shorting by Zerodha margin caculator. I get only end of month banknifty contracts there. But Banknifty has got weekly expiry schedule. Why don’t you enable weekly banknifty contracts within the combobox so that week specific margin can be calculated which may be lower than end of month margin?
The margin requirements for the weekly and monthly contracts are similar, Debashis.
The margin calculator is currently not working….
Hey Kumar. It’s working just fine. What’s the error you see?
MATTI SIR SPAN MARGIN CALCULATOR IS NOT WORKING PROPERLY IN CURRENCY SEGMENT APRIL SCRIPT IS NOT SHOWING
PLZ CHECK IT ONCE
Hi,
I am unable to get margin amount for bank nifty call or put buying specially from last two days . I have also entered current strike price.
in currency segment april script is not showing in margin calculator
Hi,
Is there a way to select BankNifty weekly options for calculating premiums and margins, right now I can only select options with monthly expiry.
Thanks
The margins remain more or less the same for weekly and monthly contracts Vibhore.
Hi,
While checking margin required for Banknifty weekly expiry date is not showing.
Kindly advice alternative ways if there any to check margin requirement for weekly expiry days.
Thanks…
Hi Nitin,
The margin calculation is not clear to me for multileg strategies. Below is the example you have given:
NIFTY Sell Call Strike Price 6200
NIFTY Buy Call Strike Price 6300
NIFTY Sell Put Strike Price 6000
NIFTY Buy Put Strike Price 5900
As we can see, both the call option and the put option are covered, with a maximum potential loss of Rs. 100 per stock. The total exposure taken by Zerodha on behalf of the customer is Rs. 5000 (for a lot size of 50). However, your margin calculation is Rs. 41000!
It seems to me that the margin calculator completely ignores the fact that the sell call/put options are protected and assumes all sell calls are naked calls. The whole purpose of using Options is to get leverage. If I have 41000 stuck with Zerodha instead of 5000, then the leverage is not usable.
I am trying to go long on Nifty via a Synthetic Future using long dated options.
Here are the facts on April 6th, 2018 around 3:15 PM:
1. Nifty is currently at around 10,300
2. For June Contract the price of 10,300 are Call: 339.4 & Put: 224.2
3. When checking Margin required for shorting June Put it shows – Span: 40,819, Exposure margin: 23,257, Premium receivable: 17,494 & Total margin: 64,076
4. When adding Long June Call to it shows – Span: 16,484, Exposure margin: 23,242 & Total margin: 39,725
5. When checking Margin required for going long on June Fut it shows – Span: 39,279, Exposure margin: 39,019 & Total margin: 78,298
6. For December Contract the price of 10,500 are Call: 546.3 & Put: 440.6
7. I am not able to find December Contracts in the SPAN Calculator
Here are the Questions:
— If I understand it correctly the Total Margin in case of shorting the put option is not taking into account the premium receivable. Thus is it to be reduced if I need to estimate the funds needed in the account to only short the Put option?
— The margin required for Synthetic Future (Sell Put & Buy Call) does not show any head for Premium. Thus is 39,725 the final and only funds needed to be kept in the account to be able to go long using a Synthetic Future, and no additional funds needed for any premium?
— If this is correct than please confirm the fact that: going long using a synthetic future is much easier on the fund requirement as opposed to the normal June future ( 39,725 vs 78,298)!
— How to estimate the margin required to replicate this position in case of a December based Synthetic Future ?
want to know the span margin for weekly bank nifty options if i am a seller
It’s around the same as the monthly contract, so you can check the requirements for the monthly contract on the margin calculator.
Hi Nitin,
I have written (sold) 3 calls for IRB Infra for May at 240. I have the following queries:
1. Why is margin so high on writing options as compared to buying/selling futures? In this case, margin involved is 9L approx. While selling future with same quantity involves only 5.5L;
2. How does the mark to market work for written calls (closing price of stock or last traded price for the call)? If the stock movement goes in my favour, do I get credit?
3. Why do I not get a creadit for call sale premium?
4. If the call is illiquid, can I exercise it with the stock exchanges mid series (before the expiry?)
Many thanks.
Hey Vineet,
1. You’re trading IRB 240 CE. The spot is at 270, which means you’re shorting an In The Money call. You’re betting that IRB will fall by 30 points by the end of the month, i.e., 11%!. Hence the higher margin requirements.
2. & 3. You get the premium credit on T+1. If the call goes against you, i.e., if the premium rises, margins are deducted MTM. The settlement happens on the basis of the premium, not the spot value.
4. No, you’ll have to wait for expiry or find a seller to buy back from mid-month.
Thanks Matti.
On 2 & 3, I understand that ‘premium’ means closing value for the call at the exchange. Please confirm.
Also, IRB calls pretty illiquid so if at the end of expiry if the call remains in the money, I will be better off just letting it expire as I understand that NSE settles it at the closing price in spot at the expiry date. Is my understanding correct?
Lastly, if the call ‘premium’ goes down on day’s close basis I understand that I will get the credit the next trading day. Am I right?
Thanks in advance for helping me out with this.
Best.
Not the closing value, but the value that you sell it at.
Yes, you can let it expire.
You get trading immediately. If the value goes down, this is deducted from MTM margins.