SPAN Calculator

Nov 5, 2013: We have released a fully online SPAN calculator tool, the first of its kind in India. The tool is free for everyone, and can be accessed here.

Traders,

SPAN calculator is a unique tool designed to help you figure out margin requirements even before you take a trade. What is unique about this is that the calculator will show you the margin benefit for taking multiple positions at the same time. The exchange gives you a margin benefit when there are positions which are hedging others and we are amongst the first few brokers to offer a tool on a trading platform which tells you this before taking a trade. Find following an explanation on how to use the tool:

STEP 1: Ensure that you are registered onto NEST PLUS. Ideally you should be automatically be registered on NEST PLUS 24 hours from when your account is active at Zerodha. If you are not registered, look at this blog on how to register.

STEP 2: While logging into the platform, ensure that you have ticked on Launch Plus. Check out the pic below:

ZT Span Calculator

STEP 3: Go to the link Nest Auto Plugins (Ctrl + Shift + P). You can also do this by following the steps on the picture below:

ZT Span Calculator

Step 4: To start the SPAN Calculator, choose it from the drop down and then click start plugin as mentioned in the image below:

ZT Span Calculator

Step 5: You might get an error message like you see below, press OK to continue:

ZT Span Calculator

Find following an example of using the SPAN calculator. As we all know margin required to buy 1 lot of Nifty futures is around 25000 (when Nifty is around 6200), what happens if you buy 1 lot of 6200 put along with buying Nifty futures? You buying 6200 put reduces the risk on the Nifty futures and hence the margin blocked should reduce. Consider that Nifty futures presently is at 6258 and nifty 6200 put is at around Rs 82. Margin for nifty futures: 25,000 / Premium Required to buy 6200 put : Rs 4,100… Together the margin required should be 29,100, but since the position is hedged, the margin requirement should be?? Look at the illustration given below:

Step 6: After the above pic, you get the following window. Add the contract and click “Add to List”. In the net quantity, add 50 (1 lot long) and add -50 (if you are shorting). In the above example, you are buying 1 lot futures and 1 lot puts, so add net qty as 50 in both the cases. See the pic below:

ZT Span Calculator

Step 7: After adding the first contract, add the second contract that you wish to add, see pic below:

ZT Span Calculator

Step 8: Click on the box next to the position and say get SPAN. See the total margin required:

As you will see in the example, the margin required reduces by quite a bit because your position is hedged.

ZT Span Calculator

Similarly find the following example where you are shorting Nifty futures and buying 6200 calls.

1. Add (-50) of Nifty October futures as shown below:

ZT Span Calculator

2. Add 50 (1 lot long) of 6200 calls as shown below:

ZT Span Calculator

3. Click on both positions and click get SPAN. See the actual margin required to take this trade:

ZT Span Calculator

Similarly you can see the margin requirements for trading commodity futures. Please note that when adding a contract for commodity in the net quantity column if you want to add 1 lot of silver don’t mention 1 but mention 30( 1 lot is 30kgs of silver) or multiples of 30. So the net quantity can be multiples of, for Gold(1, as 1kg), Silver( 30, as 30kg), Lead(5, as 5MT), Lead mini(1, as 1MT), Zinc(5, as 5MT) so on..

Similar to the examples given above, you can add multiple positions and see what the margin requirement is for the combined/individual position and see the margin benefit exchange gives that you will automatically get while trading on Zerodha Trader. It is a unique tool and Zerodha Trader is amongst the first platforms in India which gives you this facility.

*Please know that if you are using product type as MIS while placing the trades, margin blocked will be only 40% of the amount mentioned in the calculator.

Know exactly what is the margin requirement, even before taking a trade.

Happy Trading,

Zerodha

Your friendly neighborhood discount brokerage

93 comments

  1. Abhay says:

    Indeed an awesome tool, but one minor improvement can be made.

    If you could add order type (MIS/NRML/CNC), it will be more easier to take positions.

    Thank you,
    Abhay

  2. Haresh says:

    What is the basic and main Difference between below Terms
    1.Required Span Margin
    2.Required Exposer Margin
    3.Total Margin Required

    And in which circumtences it will be used ….
    Pl. explain .

    • Nithin Kamath says:

      Haresh,

      SPAN margin is the minimum required margin as suggested by NSE to hold a future position overnight.

      Exposure margin is the NSE suggested margin to keep over the SPAN margin to ensure that there is no short penalty.

      Total margin is SPAN+exposure. This is the most important thing to look at. For overnight positions we need total margin and for intraday if you use the product type as MIS, you will require 40% of this.

      • kasamparmar says:

        example : if i sell 10000 (200) quantity of 8000 call which is trading at 2.5 with the stoploss of 5 and sell 10000 quantity 7900 put trading at 2.5 with the stoploss of 5 under BRACKET ORDER AND ON THE EXPIRY DAY…WHAT WILL BE THE TOTAL MARGIN REQUIREMENT ON THAT EXPIRY DAY FOR THESE TOTAL 400 LOTS ….span calculator not helping..

      • Shashank Mishra says:

        When you give margin on CNC(delivery) base trade

  3. Chetan says:

    This is a good addition to calculate required margins.

    But, can you please provide a risk and position size calculators for commodities. Since the tick size varies, it becomes cumbersome to calculate them while trading.

    This is a must for every trader.

  4. Rafi says:

    how much exploser has given f&o for day

  5. Moses says:

    What is the exposure given for commodities

  6. viswanath says:

    Hi, I am unable to setup span calculator. It is not showing span calculator pulg-in under nest auto plugins.
    After successful login in to nest plus message it is showing opt connections : 0 –unknown error.

    Please let me know how to resolve this.

    • Hanan says:

      The key to using the SPAN Calculator is to first check the box which says ‘Launch Plus’ on your login screen. Once this is done and you login, you have to access Tools < Nest Auto Plugins or (Ctrl + Shift + P) On this screen from the drop-down please select SPAN Calculator and click on Load. This should most definitely let you load the calculator. If you're still having issues just call our support number on 080-40402020

    • Nithin Kamath says:

      Viswanath,

      You can reply to the post, instead of creating a new one, this way keeps all questions on 1 thread..

      Can you email to [email protected] with your client id, we will check this out on remote, the above steps should ideally have fixed it..

  7. Chandru says:

    I am using NSE NOW platform and not ZT , is there a way i can know my SPAN?

  8. BS1000 says:

    I am using Zerodha trader -Web version. I wanted to short 1000 Nifty Futures and simultaneously buy 1000 Call options. Based on the margins calculated by the SPAN caculator, I had sufficient margins to cover my trade. But when I tried entering the trade using Spread Order as well as individually, the system rejected my trade for want of sufficient margins. Don’t think that SPAN calculator is useful unless there is a different process for entering the trades.

    Regards

    • Nithin Kamath says:

      BS,

      Unless you take both the positions you will not get the SPAN benefit.

      We presently don’t have orders where you can take such positions simultaneously without margin requirement dropping. Spread or baskets won’t do the job.

      Actually no platform in India presently has this feature,

      The way out for now is to probably use MIS to enter the trade and then convert MIS into NRML once you have taken both the positions.

    • Sukesh says:

      Thanks, Thats a really good idea to Enter as MIS and convert to NRML.
      Just to confirm – is there any additional charges/brockerage to convert MIS to NRML?

    • Nithin Kamath says:

      No charges for converting MIS to NRML or vice versa.

  9. Sukesh says:

    Appreciate your initiative in educating investors.

    I have 2 questions:

    1st Question:
    In the SPAN Calculator we have 3 fields to enter the quantity, i.e, ‘Buy Pending Quantity’, ‘Sell Pending Quantity’ & Net Quantity’.
    Can you please tell me what is the difference between them and in what scenarios do we use them?

    2nd Question:
    I recently placed this order:
    -> Buy Nifty 6000PE – Aug 2013
    -> Buy Nifty 6100CE – Aug 2013
    -> Sell Nifty 6000PE – Jul 2013 (Option Writing)
    -> Sell Nifty 6100CD – Jul 2013 (Option Writing)

    The Span calculator had shown a margin requirement of about 29500 however even after i entered the trade completely (after executing all the 4 orders) the margin blocked was about Rs:38,000/-
    Why is there a difference between what SPAN calculator shows and what is blocked?
    Am i missing something here?

    Thanks

    • Nithin Kamath says:

      Sukesh,

      There is different margins blocked by the exchange for placing orders and for positions which are already taken. If you fill up the pending quantity boxes(buy/sell) it will tell you margins based on what is required to place them

      Net quantity box will show based on what is for holding a particular position. Ideally best to use net quantity, + for buy positions and – for short/writing positions.

      There could be small variance between what SPAN calculator shows and what is actually blocked, should not be this much, can you upload a screenshot here.

      Cheers

    • Sukesh says:

      @Zerodha:

      Thanks for quick reply. I had not taken the screen shots while placing the trade.

      Also i am a bit confused – Could you please tell if the amount shown in the SPAN calculator includes the amount i have to pay for my long positions or should i add the price of my long positions to what is shown in the SPAN calculator?

    • Nithin Kamath says:

      I got your point,

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

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

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

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

      Cheers,

  10. Vicky246 says:

    Can I trade in intraday using just Span margin?

    • Nithin Kamath says:

      For intraday you will need 40% of SPAN +exposure, at Zerodha we also give margin benefit as we settle with exchanges on T+0.

      So what this means is presently for nifty to hold overnight you need 23k with us and for intraday you need 40% of this which is around 9k. But you need to use the product type MIS while trading intraday and this will be squared off at 3.20pm if you don’t convert it to NRML which is product type to hold position overnight.

      Cheers.

  11. SatishKumarAmara says:

    Hi Zerodha,

    It is great initiative to have a blog and make it accessible to all. It is so useful.

    I wanted to write/sell a covered call(or may be hedging) as below:
    SELL (1 lot)a stock call option(CE) ABC @strick price 100 for the premium Rs.4. May be the underlaying stock is trading @95 at that time.
    As there is a risk involved if the stock price of ABC goes up beyond 100 I buy-CNC-(1 lot) the shares of ABC @95. Now even if the option premium increases there is no problem as I my stock price increasing can offset that.

    Now my questions are:
    I wanted to sell the stock option and buy the lot of shares in a single trade as: (SELL ABC CE 100 at >= 4) and (BUY 1 lot ABC-EQ at <= 95).
    1.

    • Nithin Kamath says:

      SatishKumarAmara Aug 8 2013, 1:25 pm
      Hi Zerodha,

      If my positions are not having enough margin requirement, do you immediately close them? or Do you give any grace period by warning?
      And how can I keep track of margin requirements daily and easily?
      [ Click to thank ]

    • Nithin Kamath says:

      Hi satish,

      You can use the Spread order for this, a 2L spread order. The issue with this though is that it has to be IOC(immediate or cancel), so if both the prices are not available it gets cancelled immediately.

      Yes you can give stock as margin with us as well, but we don’t have an online interface for this yet, you will have to send an email to [email protected] and the margin will be provided by the next day morning.

      Yes your losses are limited if you are short 100 calls and long 105 calls, but you would still need margins for the short calls as per exchange rules. But the good thing is that once you take the second position, the margin drops significantly. The blog above is a tool which tells you how much margin benefit exactly you get. If you are trading nifty options, use -50 for short options and 50 for long options, once added on the tool it will mention the exact margin benefit.

      Cheers,

    • SatishKumarAmara says:

      Fantastic! I like these immediate replies, though our doubts are getting repeated somewhere.

      You said 2L spread order is having only IOC, but tool is showing DAY also. Do you mean even if I select DAY; still it will be IOC? What is the reason for this, is it stock exchange limitation?

      You did not answer my another question, if there is a lack of margin amount do you immediately exercise positions w/o giving any grace period? And where can I check the margin requirements are met or not?

    • Nithin Kamath says:

      Saitsh,

      You asked if there is a way that it is executed only if both conditions are met. So either you can use day and keep as market orders for both the legs or else use IOC and keep limit order. If you are particular about the price, you will have to use IOC and limit order option.

      About lack of margin, we usually wait until 10 to 15% drop in the exchange required margins and at that point we autosquare off, we don’t intimate before squaring off.

      This link to monitor your positions: http://www.zerodha.com/z-connect/blog/view/zt-view-positions-using-admin-positions

      This link to monitor your cash and margin utilization. If it is exceeding 100% then it means you are extending: http://www.zerodha.com/z-connect/blog/view/zt-view-cash-limit

    • SatishKumarAmara says:

      Sorry.. I am not clear about 2L spread. I am particular about price then do I need to use only IOC with LIMIT order ?
      Is it not possible to order 2L with LIMIT order and DAY? I am expecting that: DAY means my order(both the legs not one) will be tried to fulfill through out the day with the given limits satisfying. Is that not possible?

    • Nithin Kamath says:

      Satish,

      If you are particular about price, you have to put limit and day order. The problem with this is that there are chances that 1 leg gets executed and other might be pending.

      It doesn’t work the way you have mentioned, no platform has that option in India presently to be able to execute both the legs only when the spread is available and keep it pending in the system.

      I guess, the only way you can do this is monitor manually and execute when you see both the prices that you are looking for.

      Hope this clarifies.

    • SatishKumarAmara says:

      Yes.. Now I understood it. A big Thanks!!

  12. Banti says:

    1) Just wanted to know whether there is change in Margin requirements for MCX? Earlier when I was trading in MCX it was showing 5% Span margin & 50% margin over that for MIS position e.g for close of SilverM (Close Price 50000) Span Margin was 5% (Rs12500) while for MIS I was needing (50% of 25000 ie 6250) but now days it requires more margin whether exchange has increased margin

    2) Now Span Margin for SilverM is 10% as per closing price of SILVERM of 50478 Span margin file downloaded from back office shows Margin requirement 25239 whreas what if analysis for NRML position Buy at 50478 shows margin Requirement of 25897 while with same price of 50478 , MIS position shows 13273.50 how this difference
    3) Presently for having MIS position how much % of margin is given by zerodha ( % of margin required wrt to NRML margin give Example)

    Regards,
    Banti

    • Nithin Kamath says:

      Yes margin for commodities have gone up because of recent volatility, 10% for Silver if trading as NRML and 50% of this if using MIS.

  13. SHARADA says:

    Sir,

    If I purchase 375 equity shares of LT and sell 1 lot of LT future 26/10/13. Will I get spread benifit. What is the required margin money for this transaction if keep both the positions till expiry of future or future premium becomes discount.

    Thanks and regards,

    Sharada

    • Nithin Kamath says:

      Sharada,

      You get a benefit if you buy LT Aug futures and sell LT Sep futures. In the example you have given, what has to be done if you need some margin benefit is buy LT 375 shares and then give these shares as collateral. Once collateral is given you are given a credit of around 70% of this into your trading account to trade futures. You can use this margin for selling the futures..

  14. Lalithambigai says:

    Hi Zerodha…

    I would like to buy 2 lots of futures and 3 lots of put as hedging. So span margin comes into calculation.
    Ex. Buy 2 lots bank nifty futures : Margin required is Rs. 91717
    Buy 2 lots of bank nifty futures and buy 3 lots of 10600 put : Margin required Rs. 52074.

    In the second case, after buying both, will I be able to sell the put separately and hold futures?

    If I could hold, can I hold it overnight or only for the intraday?

    • Nithin Kamath says:

      Lalitha,

      To buy 2 lot of futures you need Rs 52k.

      When you buy those 3 lots of puts, the risk of the futures reduces and hence the margin blocked will also reduce from 52k.

      You can hold this position for overnight as long as yo are holding the puts. If you exit the puts then the margin requirement will automatically go up for the futures.

      Hopefully this clarifies.

  15. DeepakNumber123 says:

    Hi,
    I have a Option writing position: (-50) Nifty-5300-CE-Oct.
    For 25th Sep, when I verified the required margin using SPAN-Calculator I get as following:
    SPAN Margin : 58009.28

    However My ledger account has –
    SPAN Margin : 74868.28
    The SPAN Margin is more in the ledger, can you please clarify?

    Regards,
    Deepak

    • Nithin Kamath says:

      Deepak,

      SPAN is calculated on your entire portfolio of f&O and not just the short options.

      you have long options also and this also plays determining the role in deciding how much the SPAN margin should be. A lot of people find it strange that how can margin go up when you are buying options along with shorting options, but it does as exchange calculates the SPAN based on entire portfolio of f&o.

      If on the calculator you add the other position you have as well and check the SPAN totally it will match.

      Hope this clarifies.

  16. ArunkumarBalu says:

    Hi Zerodha,

    First of all, thank you for your wonderful service!!!

    Here is my question (very basic question once again)

    On 25-Sep-2013, I could see the total margin required as 484585 for the below option writing

    Contract – 5800-PE-31-OCT2013
    Net Qty = (-1000)
    Selling Options

    So according to the guidence, should I need only 484585 X 40% which is 193834 in my account, to sell this contract?

    Thanks in advance,

    Regards,
    Arunkumar

    • Nithin Kamath says:

      Arun,

      If you are shorting/selling options for intraday you will need only 40% which is around 1.9lks , but if you want to hold this overnight you will need 4.8lks completely.

      Cheers,

    • ArunkumarBalu says:

      Thanks for quick response…. I just asked only for intraday trading…

      Another query.. for the same scenario, if I am placing cover order entry (shift+F2 in ZT), I would need only 25% right? i.e. I would need 121146 rupees for above scenario.. Pls confirm,

      Cheers,
      Arun

    • Nithin Kamath says:

      Not exactly 25% but around that much. But presently it is a little tricky to use cover orders while trading options as the trigger price has to be set within a 2% range from where the current market price is. This in case of options which moves around fast might trigger very fast.

  17. DhruvPatel says:

    This blog is really a great one. I have never been a fan of brokers who offers very low cost brokerage but after reading this blog, it seems like these people are masters in what they are doing. I am very much impressed. So finally, I have given an application for opening account in Zerodha. I hope I’ll have good experience with Zerodha.

    BTW, is there any tool available in nse website or any where else which shows the span margin without login to the brokerage account?

  18. Prabhakar13 says:

    Hi zerodha team,
    I want to know If I want to write 2000 call option with SP-6500 @ RS 7 then how much margin required for trade on intraday as well as delevery.

    • Hanan says:

      At the current market levels, the margin would be around 7.5 lakh for October and around 8.6 lakh for November series for positional trades. If you wish to do this intraday, you’ll have to park only 40% of this as margin. You can use the SPAN Calculator to know real time margin requirements.

  19. Madhura_Bhatwadekar says:

    I have a detailed query:
    When I want to do 2 transactions : Buy NIFTY6500Put and sell NIFTY6300Put,
    as position is hedged, it requires very less margin of Rs.13859. (Rs.4480 as span margin + Rs.9379 as exposure margin) according to SPAN calculator.

    But while actually placing these 2 orders, it is required to have total margin of Rs.23612 (margin required for selling Nifty6300Put => span margin of Rs. 14233 + exposure margin of 9379), though at the end-of-day, margin required comes to Rs.13859 again and around 10k is the balance margin end-of-day.

    How can I do above 2 transactions when I have Rs. 20000 in my account, which is sufficient margin if I execute both the orders, but not sufficient if I sell 6300Put only.

    • Nithin Kamath says:

      Guess I answered it on our Facebook page as well, the answer once again for other readers:

      when you are taking a position like this which is getting hedged, the margin blocked will be lesser only after you take a position and not before that. When you write an option, you will see a premium receivable in the calculator. This gets credited only after you take a position. One of the things that you can try is, write the option using MIS(which will require only 40% of this margin) and then take the long put using product type as NRML. All MIS positions get squared off by 3.20pm, so make sure to convert the short put position from MIS to NRML.

    • Madhura_Bhatwadekar says:

      Yes. Received reply on facebook page too. Thanks 🙂

  20. Sajeev says:

    Greetings,

    I am a new user and have had a good experience so far. My question relates to the difference in Span amounts for the same contracts with ICICI Span calculator and Zerodha – for Zerodha it shows around 19,000 and ICICI is around 25,000 – a difference of 33%… While from a trader’s point of view it is advantageous however since I have been trading since 2005 and witnessed the carnage of Oct 08 Lehman collapse during which a lot of discount brokers folded up and one of the main reasons was because of lax margins for HNIs so getting a bit paranoid especially with high volatility because of elections in India :-)…

    Thanks in advance,

    Warm regards,

    Sajeev

    • Nithin Kamath says:

      Sajeev,

      The Margin with us is also 25k, just like ICICI. similar to ICICI we settle with the exchange on T+0 and hence the margin required is among the lowest in the business.

      What you are looking at I guess is only SPAN, but to trade what is required is SPAN +Exposure, which is basically the total margin.

      have you checked out our new tools:
      Future Margin calculator and SPAN calculator on web

  21. Abhinay says:

    Hi,

    I have a trading account with zerodha and usually do intraday trading in equity segment. I am now looking forward to do trading in F&O segment as well. I have accessed the online SPAN calculator http://zerodha.com/margin-calculator/SPAN/ which only calculates and shows the total margin for futures segment while if i want to know it for ant stock option (call or put) it does not shows the total margin. Could ypu please clarify on it and let me know how could I get to know the total margin requirement for any scrip if i wish to trade in the options segment.

    Regards,
    Abhinay

    • Abhinay,

      When you trade options there are 2 ways, either you buy or go long options in which case there is no concept called margin. You buy calls if you are bullish and buy puts if you are bearish, in both the cases you need the entire premium to buy. So if Nifty 6000 calls are trading at Rs 100, you need Rs 5000 in your account to buy.

      The other thing you can do with options is to short or write or sell options, margin is required only in this case as is the risk in this case like futures is unlimited. So if you are adding sell option position on the SPAN calculator you can see the margin required.

      Hope this clarifies,

  22. Sagar Pattnaik says:

    Hello , thank you for your service and I am new to options .

    If I sell 1 lot (50Q) NIFTY13DEC at 6000 PE Span calculator says that 22,332 will be my total margin

    Now for Intraday at MIS , I need 40% of it 8932.80 i my account

    What happens at 3:20 pm when you square off ? Do I pocket my total premium ?

    (say LTP when day starts is 60 and by 3:20 it is 80 . So , how much do I lose ? )

    • Sagar,

      Assume when you shorted 6000 CE, the value was Rs 100. Yes you need only 8932 for shorting this option.

      At 3.20pm, all MIS positions get squared off, so if the value of the premium then is 90, you make a profit of Rs 10x 50 = Rs 500 or if the premium is 100, you make a loss of Rs 10 x 50 =Rs500. There is no premium credited to your trading account.

      So if you shorted at 60 and at 3.20 it was covered at 80, you would have made a loss of Rs 20 x 50 = Rs 1000.

  23. SKR says:

    Hi Nitin,
    Can you please let me know if there is a way of finding the zerodha brokerages while spread trading using NF?

  24. Arvind Gandhi says:

    I really appreciate your efforts. thank you.

    i want to short 6500 ce positional basis.
    1. what margin required?
    2. if the premium is increased– i have to pay mtm?

    3. if the premium is decreased — will i get credit?

    • Arvind,

      Margin required today is around 20k, you can calculate this yourself using the SPAN Calculator, Yes if the premium goes up you will have to pay the MTM, and if it is decreased the margin blocked reduces. When you short options, the entire premium is credited immediately to your account. For example, if Nifty 6500 calls is at Rs 50 and you have Rs 20,000 in your account, as soon as you take the short position your account balance will show Rs 20,000 + Rs 2500(in premium credit) and a margin of Rs 20,000 is blocked for short position.

      Cheers,

  25. can i place cover order with order type LIMIT

  26. Sreedhara Murthy says:

    I am using ZT Nest Trader 3.11.2. The 4 options listed, (i.e. Quick Login, Confirm Scrips Download, Clear and Download All Scrips and Launch Plus) in Nest Trader Login popup window is not seen. Please help me as to how to see Span Calculator.

  27. Robin says:

    Hi Nithin,
    In Brokerage calculator on the website, the Stamp charges are not included. If possible please include the stamp charges also (Option to select one’s State can be given).
    Thankyou.

  28. […] SPAN Calculator: A tool which lets you simulate a trading position and allows you to calculate the exact margin requirement even before taking the trade. Using the SPAN calculator lets you know the margin benefit for a hedged position, margins required to write options or other similar strategies. All this with a few clicks using this tool. […]

  29. Abhinav Jain says:

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

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

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

    • Abhinav, margins are decided by the exchanges. Only calendar spreads trade directly on exchange, and hence get margin benefit. With all other option strategies, there is an execution risk while entering and exiting both the positions, hence exchange asks for more margin. Also, liquidity drop in one of the contracts can also cause trouble.

  30. Anish says:

    Hi,
    https://zerodha.com/margin-calculator/Futures/ is showing “0” in lot size, NRML margin & MIS margin for NIFTYINFRA, NIFTYIT etc. Why?

  31. SK says:

    Does Zerodha allow hedging in the same category? For e.g to execute buy and sell bracket orders on the same stock at different pivot levels? My broker doesn’t allow this. Whenever there are two trades in the opposite direction, they get squared off. They are not considered as separate orders.

  32. santana says:

    Hi,
    My ID DS5660
    I want to trade in commodity future Positional.
    But when I trade in future positional, I will place order always with a trailing stop loss.
    So I will be in future position till expiry or trailing stoploss hit.
    Now querries as under:
    1) What is the margin require for my order.( as it is order with trailing stop loss )
    2) CO and BO features are for intraday orders only. My order is like CO used for Positional trades.
    3) Is there any feature in your PI platform or can I use algo set up ?

    Kindly give suggestions.

    yours trully,
    s.S. Pereira

  33. Vasantharam says:

    In the month starting i had initiated a spread in Bharti Airtel.
    Buy Sep Futures @ 347 and Buy 350 Put and the margin blocked was approx.INR 85000.
    On 23rd Sep’16 i have initiated a straddle and strangle in the same Bharti airtel contract(Sep’16 expiry).
    As per SPAN calculator the overall margin to be blocked is approx.INR 75000(Inclusive of initial Futures and Put options margin + Straddle and strangle margin).
    But the blocked amount is approx. 1.7lakhs.
    All my strategies are in the same asset only and loss is limited max of INR 10,000 irrespective of the market movement and SPAN is also showing INR 70K but in real scenario the blocked margin is more than double?
    If it’s so for retail traders it’s very difficult to run multiple strategies by using the span calculator.
    Kindly suggest and do the needful.

    • Vasanth, the margin blocked is exactly what the exchange blocks, brokers don’t get any leverage to offer to their clients in turn. Exchanges also look at execution and liquidity risk when looking at a F&O portfolio.

  34. Vasantharam says:

    If the exchange is deciding the margin then there is no use of SPAN Margin calculator.
    Pls understand, my money management is as per zerodha’s span calculator margin only with some tolerance(Daily M to M loss/profit).
    If the calculator shows INR 75K but the actual margin blocked was 1.7LAKHS. I hope on daily basis the margins used to vary, if this is for new position means fine(due to volatility variation) but already opened position its very difficult.
    On what basis can i go for new strategy execution, kindly suggest.

    For Eg) If today i am executing the short straddle and strangle in the same asset with the free cash available with me(For eg INR 1 Lakhs) and the blocked margin is INR 70k only but tomorrow if the exchange requires more margin and due to insufficient fund my positions would be closed in loss even though if my max loss in the strategy is 5% only.

    If it so its very difficult to execute more strategies by retail traders.

    How can we avoid this kind of issues?

  35. Niranjan Jena says:

    Bank Nifty weekly options are not added to your Span Margin Calculator. When are you going to add this to your list?

  36. TRIPTI says:

    Hey hi there, my question is i will be trading in futures in mis or bracket order since it will be squared off does the lot get sold at once or does it get sold in multiple step
    b. when in futures using bracket order should i calculate using bracketcover order calculator wherein 40% on actual value i should i have or i should see the total margin in f&o calculator and its 40% value amount
    c. in s&p 500 18-aug 2017 is showing margin required zero with infinity leverage in bracket calculator, and in f&o it 48…. something figure for 1 lot …….so does it mean i cannt use bracket order in this symbol of trade
    d. if i m taking 40% of total margin to trade and thats the only fund total i have in account then when it will go mtm will i get penalty and the trade will be exited on its own

    • a. One exit order is placed.
      b. Total in F&O and then 40% of it.
      c. You can use bracket order, looks like a bug on our BO calculator, checking.
      d. yes, if you lose more than 30% of this margin on intraday basis, it will auto exited.

  37. Shashi says:

    If i brought 1 lot nifty future and 1 lot nifty put in mis product what is the margin requirement

  38. Payoj Jain says:

    Dear Zerodha Team,
    Love your work and efforts.

    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 ?

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