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Other Trading ChargesSPAN Margin (Standard Portfolio Analysis of Risk) is a risk-based margining system used by exchanges to calculate the minimum margin requirement for a client’s Futures & Options (F&O) portfolio. It is designed to cover the maximum potential loss a portfolio may incur in a single day, based on 99% Value at Risk (VaR).
The SPAN Margin is collected upfront at the time of order placement and is dynamically revised throughout the trading day by the exchange, depending on changes in market volatility or portfolio risk.
“Exposure margin is charged over and above the SPAN margin by the exchanges to cover risks that may not be fully captured by the SPAN framework.
The total of SPAN margin and Exposure margin is known as the Initial Margin, which is collected upfront from the client at the time of entering a position.“