What is span and exposure margin

[mutualguru]

I want to calulate the total margin required for future trading and i have used this tool to do the above https://zerodha.com/margin-calculator/SPAN . They calculate total margin using this formula

Total margin =SPAN margin+Exposure margin

what is this span and exposure margin? and why its important for calculating total margin

 

[alroyraj]

I want to calulate the total margin required for future trading and i have used this tool to do the above https://zerodha.com/margin-calculator/SPAN . They calculate total margin using this formula



what is this span and exposure margin? and why its important for calculating total margin

Span margin is imposed by the exchange whereas exposure margin is imposed art the broker level. As a trader it will not matter to you as without having total margin you can open/enter a future position. Also practically you need to have at least 10% more to manage the mark to market.

I want to calulate the total margin required for future trading and i have used this tool to do the above https://zerodha.com/margin-calculator/SPAN . They calculate total margin using this formula



what is this span and exposure margin? and why its important for calculating total margin

I want to calulate the total margin required for future trading and i have used this tool to do the above https://zerodha.com/margin-calculator/SPAN . They calculate total margin using this formula



what is this span and exposure margin? and why its important for calculating total margin

 

[mutualguru]

Span margin is imposed by the exchange whereas exposure margin is imposed art the broker level. As a trader it will not matter to you as without having total margin you can open/enter a future position.

Thanks alroyraj for the quick reply but what you meant by As a trader it will not matter to you as without having total margin you can open/enter a future position

Lets say total margin of a future contract is 80,000 Rs and span and exposure margin are 50,000 Rs and 30,000 Rs respectively. so can i enter a future position using 50,000 or 30,000 Rs alone.

 

[eku]

yes,Intraday margin will be only 30k