How is F&O margin calculated in India?

F&O margin in India is calculated as SPAN margin plus Exposure margin. SPAN margin is computed by NSE's Standard Portfolio Analysis of Risk system based on worst-case 1-day loss scenarios for your portfolio. Exposure margin is an additional buffer, typically around 3% for index futures and higher for stock futures. The combined margin typically ranges from 8% to 20% of contract value, varying daily with market volatility.

SPAN (Standard Portfolio Analysis of Risk) margin is the risk-based minimum margin prescribed by SEBI for futures and options writing positions. It is computed by NSE's SPAN system, which models worst-case one-day loss scenarios across all positions in a portfolio, accounting for price moves, volatility changes, and time decay. SPAN margin is recalculated every evening for the next trading day.

Do option buyers need to pay margin?

No. Option buyers only pay the premium upfront — no additional margin is required. SPAN and Exposure margin requirements apply only to options sellers (writers) and futures positions, since these carry unlimited or large potential loss exposure. The premium paid by the buyer is the maximum loss for a long options position.

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Equity Margin
Calculator

See the margin you need for an equity trade — intraday or delivery — from the VaR + ELM percentage, and the leverage it gives you.

Your trade

Mode

Buy price (₹ per share)

₹

Quantity (shares)

VaR + ELM margin (%)

Margin required

Margin to block

₹30,000

5.0x leverage

Trade value₹1,50,000

Margin rate20%

Margin required₹30,000

VaR + ELM varies per stock and is set by the exchange daily. Use your broker's figure for the exact margin; delivery (CNC) usually requires the full trade value.

How equity margin works

When you trade equities intraday (MIS), your broker blocks a margin rather than the full trade value — that's what gives you leverage. The minimum margin is set by SEBI as VaR + ELM:

VaR (Value at Risk) — the expected worst-case one-day move for that stock.
ELM (Extreme Loss Margin) — an extra buffer on top of VaR.

The two together form the margin percentage. It's higher for volatile stocks and lower for large, liquid ones. The formula is simply:

Intraday margin = Trade value × (VaR + ELM %) · Leverage = 100 ÷ (VaR + ELM %)

For delivery (CNC), you take delivery of the shares, so you generally need the full trade value upfront.

How to use this calculator

Enter your buy price and quantity, then the stock's VaR + ELM percentage (your broker shows this on the order window). Switch between Intraday and Delivery to compare the capital each needs. This is the same margin logic used inside TradePulse — here it runs entirely in your browser.

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What is Margin in F&O Trading?

Margin is the deposit you must maintain to hold a futures or options writing position. SEBI mandates two components: SPAN margin (risk-based, calculated by the exchange's Standard Portfolio Analysis of Risk system) and Exposure margin (an additional buffer). Together they form the minimum required collateral. For options buying, only the premium paid is required upfront — no margin is blocked beyond that. For options selling (writing) and futures positions, full SEBI-prescribed SPAN + Exposure margin must be maintained throughout the life of the position.

Equity Futures Margin Requirements

For equity futures, SEBI prescribes a SPAN margin that typically ranges from 5% to 15% of contract value depending on the stock's volatility, plus an Exposure margin that usually falls between 1% and 3%. The combined initial margin therefore typically ranges from roughly 8% to 20% of the total contract value. These percentages are not fixed — they change daily based on market volatility and are recalculated by NSE's SPAN system every evening for the next trading day. High-volatility periods such as budget announcements or earnings seasons can push margins significantly higher.

How Margin is Calculated

Total margin = SPAN Margin + Exposure Margin

SPAN Margin — computed by NSE's SPAN system based on worst-case 1-day loss scenarios modelled across your full portfolio of positions. It accounts for price moves, volatility shifts, and time decay simultaneously.
Exposure Margin — an additional buffer collected on top of SPAN, typically around 3% for index futures and higher for individual stock futures. It guards against gap-down opens and extreme intraday moves.
MTM (Mark-to-Market) — at the end of each trading day, all futures positions are settled to the closing price. Profits are credited and losses are debited from your margin account. If losses erode your margin below the maintenance level, you receive a margin call.

Margin Penalty Rules

If your margin balance falls below the prescribed minimum at any point, your broker may issue a margin call or square off your positions to protect themselves. SEBI introduced peak margin rules in 2021 requiring intraday peak margin reporting — brokers must report the highest margin utilisation seen during the trading day, not just the end-of-day snapshot. This means you must maintain full margin throughout market hours. Failure to meet peak margin requirements can result in a penalty of 0.5% to 1% of the shortfall per day, levied by SEBI.

Using the TradePulse Equity Margin Calculator

Enter your stock or index, lot size, and quantity to see the approximate SPAN plus exposure margin required for that position. Values shown are indicative and based on the latest available volatility data. Actual margin requirements may differ slightly depending on your broker, any portfolio-level SPAN benefit from offsetting positions, and the specific contract month selected. Always confirm the final margin figure in your broker's order window before placing the trade.

Equity MarginCalculator