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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.

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...

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European Options

It allows the holder to buy or sell an underlying asset at a predetermined price on the expiration date. The key difference between a European option and an American option i...

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Intrinsic Value of an Option

This value is important to consider when making investment decisions. Understanding the concept of intrinsic value in the world of finance is crucial for making informed inv...

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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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