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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.

At-the-money

Let's delve into the world of finance and explore the concept of at-the-money options. These options, if exercised immediately, would result in zero cash flow. In simpler te...

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Futures Contracts

This asset can be a commodity, stock, currency, or any other financial instrument. A fundamental concept in finance, Futures Contracts are powerful tools used to manage ris...

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Convergence

It is an essential concept in financial markets. As we dive into the world of finance, it's important to understand the concept of convergence. This term refers to the grad...

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Exercise

This can happen at anytime before the options contract expires. Options trading involves the concept of "exercising," which refers to the act of utilizing the right to buy ...

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