Margin is the collateral you deposit with your broker to take leveraged positions in futures, options, and intraday equity trades. SEBI mandates minimum margin requirements (SPAN + Exposure) to manage systemic risk. Our margin calculator helps you determine how much capital you need to hold a position — so you don't face unexpected margin calls.
SPAN Margin vs Exposure Margin
SPAN (Standard Portfolio Analysis of Risk) margin is the minimum upfront margin required by the exchange, calculated daily using SEBI's risk methodology. Exposure margin is an additional buffer collected by the broker — typically 4–5% of the contract value for equity derivatives. Together, these form the total margin requirement. Most brokers collect a combined upfront margin covering both.
How Leverage Works in F&O Trading
Leverage lets you control a larger position with less capital. A Nifty futures contract worth ₹10 lakh may require only ₹1.2–1.5 lakh as margin — giving you ~7× leverage. While this amplifies profits, it equally amplifies losses. A 1% adverse move in Nifty means a 7% loss on your margin capital. Responsible use of leverage is the cornerstone of sustainable trading.
Margin Shortfall and SEBI Penalty
SEBI imposes a penalty of 0.5% per day on margin shortfall. Brokers must report client margin shortfalls to exchanges daily. If your margin falls below the minimum level intraday, your broker may square off your position without notice — this is called forced liquidation.
Frequently Asked Questions
What happens if I face a margin call?
If your account balance falls below the required margin, your broker will ask you to top up. If you don't, the broker can close your open positions to prevent further losses.
Can I use shares as margin collateral?
Yes. SEBI allows pledging equity shares in your demat account as collateral margin. A haircut (discount) of 20–50% is applied depending on the stock's risk profile.
Is margin required for buying options?
For buying options, you only pay the premium upfront — no additional margin. Margin is required for selling (writing) options and for futures positions.
What is the margin for Nifty futures?
Nifty futures margin varies with volatility — typically ₹1.1 lakh to ₹1.5 lakh per lot (lot size = 25 units). Check your broker's margin calculator or the NSE website for the current rate.