What is NSE Margin and how to calculate it?

NSE is the leading stock exchange of India where you can get engaged in stock trades through registered stock brokers. Investors have to open their demat and trading account to start with trading. Demat account is the account opened only for the purpose of storing the stock and other financial commodities in electronic form since physical documents are not promoted for stock trading. Trading account is the account to manage the cash transactions.

Span margin

Since the stock market is subjected to losses, you have to keep the sufficient amount of money in the trading account in accordance with the value of the stock or other commodities. This amount when you trade in NSE is called as NSE Span Margin and is commonly used in intraday trading or day trading. Since the stock market is highly volatile and the particular stock at the top can come down in the next minute, it is difficult to figure out a margin amount that is enough to cover the expected losses when the market faces worst conditions. Here comes the importance of the span margin calculator.

Span margin calculation made easy

Now there is no need to worry about the credentials and methods to calculate span margin since reputed brokers provide the well-designed calculators for the purpose. SPAN in the stock market simply means Standardized Portfolio Analysis of Risk. Most of the stock exchanges used this system to calculate the margin amount that an investor has to keep in his or her account to cover potential losses. Most of the reputed brokers have developed calculators based on this technology to help the investors in calculating the SPAN amount instantly to keep the sufficient amount in the account.

Calculation of SPAN

SPAN calculation is based on machine learning techniques and complicated algorithms. The margin amount is calculated on the basis of global market assessment and it will be different for different security and stocks since the risk factors vary for each of them. The calculator is made in accordance with the above factors and it calculates margin tracing the historic volatility of the given asset. Span margin will be higher for the assets with higher volatility.

Free service

The calculators come as the free service provided by repute stockbrokers. It is your responsibility to assure sufficient margin amount in the account to engage in the smooth trading process. So make sure that that your stock broker provides the complete range of services including brokerage and SPAN calculator. Now you can calculate the margin for the intended stock at any time at the expense of a few clicks even on mobiles. The margin amount is calculated for worst market conditions that the market can experience to assure the maximum possible SPAN margin the account.

Now you can calculate NSE Span Margin within few steps by entering the basic details including the product type and the lot size. The calculation helps you to invest in the products that need less margin amount comparatively to trade with minimum investments.

Now you better know what is SPAN margin and the importance of calculating the same in stock market trading.

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