1. What is a Zerodha Option Margin Calculator?

Definition: This calculator estimates the total margin required for options trading on Zerodha platform by summing up premium, SPAN margin, and exposure margin.

Purpose: It helps traders understand the capital requirements before placing options trades on Zerodha.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• Premium — The price paid/received for the option contract
• SPAN Margin — Standard Portfolio Analysis of Risk margin calculated by exchanges
• Exposure Margin — Additional margin for extreme market movements

Explanation: The total margin requirement is the sum of these three components as per Zerodha's risk management system.

3. Importance of Margin Calculation

Details: Proper margin calculation ensures traders have sufficient funds in their account to cover potential losses and avoid margin calls.

4. Using the Calculator

Tips: Enter the premium amount, SPAN margin, and exposure margin in Indian Rupees (₹). All values must be ≥ 0.

5. Frequently Asked Questions (FAQ)

Q1: Where can I find SPAN and exposure margin values?
A: These are displayed in Zerodha's Kite platform when you select an option contract, or you can use Zerodha's margin calculator.

Q2: Does this calculator work for all option strategies?
A: This calculates margin for single leg options. Complex strategies may have different margin requirements.

Q3: Why is margin required for options selling but not buying?
A: Buyers risk is limited to premium paid, while sellers have unlimited risk potential requiring margin.

Q4: How often do margin requirements change?
A: SPAN margins are updated daily by exchanges based on volatility. Exposure margins may change periodically.

Q5: Is there any way to reduce margin requirements?
A: Using margin reduction strategies like spreads or providing higher collateral may reduce requirements.