1. What is a Margin Calculator for FNO?

Definition: This calculator estimates the margin required for Futures and Options (FNO) trading based on contract value and margin percentage.

Purpose: It helps traders determine how much margin capital is needed to enter FNO positions.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( M \) — Margin required (currency)
• \( CV \) — Contract value (currency)
• \( MP \) — Margin percentage (%)

Explanation: The contract value is multiplied by the margin percentage (divided by 100) to calculate the required margin amount.

3. Importance of Margin Calculation

Details: Proper margin calculation ensures traders maintain sufficient funds in their accounts to cover potential losses and meet exchange requirements.

4. Using the Calculator

Tips: Enter the contract value in your currency and the margin percentage required by your broker. All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: What is contract value in FNO?
A: Contract value is the total value of the futures or options contract, typically calculated as (lot size × current price).

Q2: How is margin percentage determined?
A: The exchange sets base margin requirements, but brokers may add their own additional margin requirements.

Q3: Does margin requirement change?
A: Yes, margin requirements can change based on market volatility and other risk parameters.

Q4: Is this calculator suitable for all FNO products?
A: The basic principle applies, but different products (index futures, stock futures, options) may have different margin calculations.

Q5: Should I maintain more than the minimum margin?
A: Yes, maintaining additional margin (buffer) is recommended to account for mark-to-market losses.