SAMCO’s ED & President Nilesh Sharma Says Margin Calculators Are Game Changers for Traders
This surge in trading activity has increased the focus on the crucial role of margin requirements in the F&O segment. To assist traders in navigating these requirements, SAMCO Securities offers a user-friendly SPAN margin calculator.
This online tool enables traders in the derivatives segment to understand and plan for their margin obligations efficiently and transparently.
The Importance of ‘Margin’ for F&O Traders
Margin in futures and options trading is essentially a form of financial leverage that allows a trader to borrow money and trade with more than their available capital. This amplifies their buying power and empowers them to control a much larger position in the market than what their own capital would otherwise allow.
In simple terms, the margin facility allows traders to buy more contracts than they could with their cash alone.
Consequently, if the market moves as expected, the trader’s returns are enhanced because the profits are calculated on the total value of the position — and not just on their initial investment.
This can lead to significantly higher returns, which is the primary allure of using margins in futures and options trading.
Margin trading also offers the advantage of diversification. With more buying power, traders can spread their investments across a wider array of derivatives like index futures, index options and even individual stock options.
