Margin Calculator

TransactionValue

₹0.00

Margin required

₹0.00

*These numbers are for illustration purpose only. Actual numbers may vary.

What is Margin Calculator?

A margin calculator is your companion to find out the profit margin and other important aspects about your futures and options trade. In this profit margin calculator, you can calculate all the crucial variables of your trade.

You can take your margin trade to a whole new level with the help of an option margin calculator. This tool works for equity and index trade. As you can get a break up of margin components that include type of contract, buy and sell, premium margin, span margin, exposure margin etc.

The F&O margin calculator is available online you can enter your trade detail and get results instantly.

Types of Margin

There are various types of margin that can be used in the margin calculator. These are as follows:

  1. The SPAN Margin

    In the SPAN margin, it is the most basic and major F&O trade. The SPAN stands for the Standardised Portfolio Analysis of Risk. This type of margin is used to measure the maximum loss that can happen in the portfolio. You can get SPAN margin six times a day, therefore depending upon the value changed you can use the margin calculator.

  2. The Exposure Margin

    In the exposure margin, you can check the additional margin collected to protect the broker’s liability in adverse market conditions.

  3. Extreme Loss Margin

    For the extreme loss margin you get the result for the losses that might occur beyond the VAR margins. It is considered the highest of the following two values such as the 5% of the value of the asset position in the trade. 1.5 times to the standard deviation of the daily logarithmic return of the assets price over the last six months.

  4. The VAR Margin

    A Value at Risk margin is the calculation that measures the probability of a loss in an asset’s value which is based on the statistical analysis of historical price movements as well as volatility of the asset.

Gross Margin Formula

The gross margin % is computed with the following formula:

gross margin = 100 × profit / revenue

(as stated in percentages). The profitability equation is:

profit = revenue - costs

So, an alternate margin formula is:

Margin = 100 x (revenue - expenses) / revenue.

Now that you know how to calculate profit margins, here is the revenue formula:

Revenue = 100 x profit / margin.

Finally, to determine how much you can spend for an item, given your margin and revenue (or profit), do the following:

Costs = revenue - margin × revenue / 100.

How to Calculate Profit Margin

Calculate your cost of goods sold (COGS). 

For example, if your COGS is ₹30. Determine your revenue (how much you sell these goods for), for instance, ₹50. Calculate the gross profit by subtracting the cost from the revenue: ₹50 - ₹30 = ₹20. Now, divide the gross profit by revenue: ₹20 / ₹50 = 0.4. Calculate it as a percentage: 0.4 * 100 = 40%. 

How to use a Margin Calculator?

To use a profit margin calculator you need to check the type of your trade whether it's commodity, equity or other type of investments.

Trading in futures and options contracts requires a margin requirement for smooth trading and higher capital. Using a margin calculator online allows for a quick and accurate assessment of the required margin, fulfilling the requirement and trading easily in the share market.

You need to carefully select the input and enter the correct data to get an accurate result from the above profit margin calculator. The total margin is calculated and needed to compute the SPAN margin and the exposure margin individually. The margin calculation is not an easy calculation, but through the options margin calculator you can easily get your solution for margin trade. This tool uses a simple tool and computes results based on the input provided by the user.

FAQs on the Margin Calculator

Some of the benefits of using an online margin calculator is that 

  • You can calculate the F&O margin instantly.
  • It saves your time as well as energy.
  • You can easily plan ahead according to the calculation of your margin trade

An online margin calculator is an easy-to-use tool for calculating the trading margin required in F&O trades. These calculators ensure that the trade has the following outcome, according to which traders can modify their F&O trade. Explore various margin calculators such as future margin calculator, equity margin calculator, intraday margin calculator, and stock margin calculator for accurate calculations and informed trading decisions.

For equity trade, you don't need a margin as it is a cash market. But for F&O trade you need to have a margin for about 20% of your trade value added to your trading account. Or else you can pledge your existing securities in your Demat account as collateral.

When large swings take place in prices of assets the SPAN margins are revised upwards and once the volatility subsides, the margins gradually reduce back to the ground levels.

A margin refers to the amount which is payable to the broker for taking a particular position in the stock market. In derivative trading, the broker will collect the margin upfront amount which is required to cover risk caused by the stock market volatility. To start a trade at the beginning of the trade  you need to add an initial margin, which is defined by the trading quantity and current value of the underlying assets.

Gross margin refers to the entire proportion of gross income earned by a company's revenue. Net margin refers to the entire proportion of net profits earned by a company's revenue. The gross margin is bigger than the net margin since it excludes administrative and selling expenditures.

If your gross margins are large, it simply indicates that your manufacturing expenses are fair in comparison to your product's selling price.

Margin and profit differ. Margin is the amount required to open a position, while profit is the amount gained after deducting costs from revenue.

Margin for F&O varies, typically a percentage of the contract value, determined by the exchange.

Margin is calculated using the exchange's prescribed methodology, which considers factors like volatility, contract value, and risk.

SPAN margin requirement is a standardised method for calculating margin, incorporating price volatility and risk.

Margin requirement in the cash market depends on regulations and broker policies, usually a percentage of the transaction value.

The upfront margin is the initial margin collected before trade execution, ensuring sufficient funds to cover potential losses.

Exposure margin safeguards against adverse market movements beyond the initial margin, protecting positions from excessive risk.

Net premium margin is the margin collected on options positions, factoring in the net premium paid or received, ensuring sufficient funds for potential obligations.

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