Calculate margin for bad days

0
273

As soon as investors decide to go for trading in the market of shares, they are required to put enough sum of money within their account so that any losses on the investment can be covered. In the stock industry this sum of money is referred to as margin and can be normally utilised during day trading or intraday trading. The margin money is the base of offering a credit line to the client in the absence of any security with the trading house. The credit or risk department offers the limit to the client account a certain times of the margin money. One can pay this margin money by a cheque or direct credit to the account of the broker. Once the margin money is received by the client, the risk department opens the limit. In certain cases they offer the limit on the basis of cheque received also but in that case they need to have a personal reference that can assure the payment in case of loss.

Since the market is very unpredictable and the positions are also prone to fluctuation with regard to their value, it may be quite hard to calculate margin amount that must be enough to provide cover to losses in case the market experiences worst state of affairs- scenarios. Here you can say role of span margin calculator is needed.

Definition of span margin calculator

Within the share market industry all over the globe span is the abbreviation of standardised portfolio analysis regarding risks. It makes a kind of system that is utilised by a number of stock exchanges to compute the sum of money any investor is required to put in his account so that potential losses are covered.

This span system is founded on intricate algorithms as well as techniques pertaining to machine learning and evaluates margin founded on the appraisal in relation to the markets world over. This span margin calculator is able to estimate the margin with respect to each one position and if there is excessive margin it is transferred to novel positions that suffer shortage of the margin money.

Steps to estimate margin utilising the calculator of span margin

You are able to compute margin utilising this margin calculator as given below:

Decide for the exchange wherein you wish to do trade either in BSE or it can be NSE.

You must select the product of which you desire to compute margin which may be either options or futures.

Also you are needed to pick the ticker symbol concerning any company of which you wish to do trade options or futures.

After that, you are needed to choose size of lot that you are interested to sell or purchase.

You must mark the choice of sell or buy respectively you are going for either sell or buy.

As soon as you provide all these details, then you shall be given the sum of margin that you are required to put in the account. Such sum of money is computed bearing in mind the market can pose the worst state of affairs –scenarios.

LEAVE A REPLY

Please enter your comment!
Please enter your name here