F&O margin is the capital required to take a futures or short-options position. It has two components: SPAN (worst-case scenario margin) and Exposure (additional buffer). Buying options requires no margin — only the premium paid.
What is F&O Margin?
Futures and options margins are calculated by the exchange itself (NSE / BSE), not the broker. The exchange uses a risk model called SPAN (Standard Portfolio Analysis of Risk) that simulates worst-case scenarios for your position over 1-2 day price moves. The output is the SPAN margin — the absolute minimum capital you must hold.
Exchanges add an additional Exposure margin on top of SPAN as a buffer. Together, SPAN + Exposure is what the broker collects from you. Different brokers may add their own additional margin on top for safety, especially on illiquid contracts or volatile stocks.
Option buyers are different — they don't pay margin, only the premium. The maximum loss is capped at the premium paid, so there's no need for a margin buffer.
SPAN + Exposure
For a futures or short option position, total margin = SPAN + Exposure. Intraday positions (MIS) typically get a 30-40% margin discount over overnight (NRML), but only for the same trading session.
- SPAN
- Standard Portfolio Analysis of Risk—exchange's worst-case loss simulation
- Exposure
- Additional buffer—extra margin above SPAN
How to use this calculator
Three inputs: instrument type, lot value (notional), position type.
Pick instrument
Equity/index futures, option buy, or option sell. Buying options requires only premium — no margin.
Enter lot value
For futures: contract size × current price (e.g., Nifty 50 lot × current price). For options sell: lot size × strike or current premium × lot size.
Pick position type
Overnight (NRML) holds across days. Intraday (MIS) gets margin discount but auto-squared at session end.
F&O margin use cases
Position sizing
Available capital ÷ margin per lot tells you how many lots you can take.
Leverage estimation
If margin is 12% of lot value, you have ~8× leverage on the underlying.
Strategy planning
Combos like spreads, straddles, strangles need calculated margins for each leg. Add them up before deciding the trade.
M2M risk understanding
F&O positions are marked-to-market daily. Adverse moves trigger margin calls — know how much buffer you have.
Glossary
- SPAN
- Standard Portfolio Analysis of Risk — exchange's risk model that calculates worst-case loss.
- Exposure margin
- Additional buffer above SPAN, also collected by the exchange.
- M2M (Mark-to-Market)
- Daily settlement based on closing price. Profits credited / losses debited every day.
- NRML
- Normal product code — overnight F&O positions. Higher margin.
- MIS
- Intraday F&O — auto-squared at session end. Lower margin.
- Lot size
- Minimum number of underlying units per F&O contract. Set by the exchange per stock.