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SPAN Margin

Let's delve into the world of finance and explore the concept of initial margin for the F&O segment. This margin is not calculated on an individual basis, but rather on a portfolio approach. To perform this calculation, we use a software called SPAN® (Standard Portfolio Analysis of Risk). This powerful tool generates 16 different scenarios by adjusting price and volatility values. It then determines the potential loss the portfolio could face in each scenario. This allows us to make informed decisions and manage risk effectively in the F&O segment.

In-the-money

An option is considered In-the-money when the buyer is in a profitable position at a specific spot price of the underlying securities. This term is used in reference to both ...

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Extrinsic Value

The intrinsic value is the inherent value of an option determined by its underlying asset's current price. This means that the extrinsic value is influenced by factors such a...

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Call Option

A call option grants the holder the right, but not the obligation, to purchase a stock at a predetermined price during a specific timeframe. It is commonly used by investors...

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Last Trading Day

In finance, the last trading day is the ultimate opportunity for a derivative contract to be either traded or settled before the delivery of the underlying asset or cash set...

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