Medi Assist Healthcare IPO

Home Derivatives

Finance Wiki

Trending Categories

All Financial Terms Financial Instruments Market Entities Corporate Actions Public Offerings Fixed Income Instruments Currency Commodity Mutual Funds Derivatives Trading Terms Taxes

More

Derivatives Trading Terms Taxes Property Fixed Income Credit Cards Options and Futures Stocks Insurance IPO Technicals Retirement Planning Loans Gold Bank Deposits

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

R

S

T

U

V

W

X

Y

Z

#

Derivatives

Exposure Margin

As we continue our exploration of the fascinating world of finance, let's delve deeper into the concept of exposure margin in the F&O segment. This margin serves as an additional layer of protection for our positions, complementing the Initial/SPAN® margin. When it comes to index futures and index option sell positions, the exposure margin is set at 3% of the notional value. However, for individual securities, the margin is higher at 5% or 1.5 standard deviations of the logarithmic returns of the stock over the last six months in the underlying cash market. Keep in mind, this margin is applied to the notional value of a position.

Long Hedge (Futures)

A long hedge refers to a strategy where an investor takes a long position on a futures contract. This is commonly utilized by hedgers who plan to purchase an asset in the fu...

More

Holder (Option Buyer)

The holder, also known as the owner, of an option contract possesses the privilege to exercise the option within its duration. This privilege is acquired by the holder throu...

More

Intermarket Spread

Intermarket spread refers to the variation in price of a particular contract across different exchanges. This difference can arise due to various factors such as market dema...

More

Out-of-the-money

An option that would result in a loss upon immediate exercise is known as an out-of-the-money option. Specifically, a Call option is considered out-of-the-money when the cur...

More