How can I calculate the margins required to place an F&O trade?

When you trade in futures and options (F&O), you’re required to maintain a certain amount of capital to enter and maintain a position. This is called the margin. It is the amount of capital or collateral they need to enter or hold positions in the market.

Calculating the margin beforehand helps you:

Know how much capital to keep in your trading account
Plan your position sizes better
Avoid order rejections due to insufficient funds
Take advantage of margin benefits for hedged positions

To make this process simple, Share India provides an online Margin Calculator that helps you calculate the estimated margin required for your trades.

Step-by-Step Guide to Using Share India’s Margin Calculator

You don’t need to be an expert to use this tool. Just follow the steps below:

Step 1: Visit the Share India Margin Calculator

Step 2: Select the exchange you want to trade in.

Step 3: Choose the instrument type and symbol.

Step 4: Select the expiry date and enter lots you want to trade in.

Step 5: Select whether you want to ‘Buy’ or ‘Sell.’

Step 6: Click the ‘Add’ button. This will generate a breakdown of the margin requirement based on your selected trade.

What Does the Calculator Display?

After submitting the inputs, the calculator will show:

SPAN Margin: The minimum amount of margin required by an exchange to cover the risk of a trader’s portfolio in derivatives trading.
Exposure Margin: Additional margin required by exchanges to mitigate potential losses from extreme market swings.
Premium Payable: If you’re buying options, this is the amount you need to pay upfront.
Total Margin: The combined margin requirement.
Initial Margin: The upfront margin needed to initiate the trade
ELM (Extreme Loss Margin): An additional margin required to cover potential losses in extreme market conditions or price volatility.
Margin Benefit: If your position is part of a hedged strategy (like a spread), the calculator will show how much margin benefit you can expect.

This breakdown helps you estimate the capital you would require before planning your next trade.

Want to place your first trade? Get started here with Share India by opening our Demat account.

For any assistance, you can contact the Share India support team via email at support@shareindia.com or by phone at 1800 203 0303.