Margin Calculation Formula:
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Definition: This calculator estimates the margin required for Futures and Options (F&O) trading based on the contract value and margin percentage.
Purpose: It helps traders determine the capital required to enter F&O positions, particularly useful for Zerodha and other brokerage platforms.
The calculator uses the formula:
Where:
Explanation: The contract value is multiplied by the margin percentage to determine the required margin amount.
Details: Proper margin calculation ensures traders have sufficient funds to enter positions and understand their capital requirements before trading.
Tips: Enter the contract value (in your currency) and margin percentage (as specified by your broker). All values must be > 0.
Q1: How do I find the contract value?
A: Contract value = Lot size × Current market price of the underlying asset.
Q2: What's a typical margin percentage for Zerodha?
A: Zerodha typically requires 10-40% margin depending on the instrument and volatility.
Q3: Does this include SPAN margin?
A: No, this is a basic calculator. Zerodha uses SPAN margin which is more complex.
Q4: Can I use this for intraday trading?
A: Yes, but remember intraday margins are typically lower than overnight margins.
Q5: How often do margin requirements change?
A: Brokers may adjust margins based on market volatility, usually announced in advance.