FNO margin calculation

Zerodha
1

In zerodha, basket feature tells the total margin required for combined set of contracts. For ex:

SELL 1 LOT - NIFTY 26000 CE
BUY 1 LOT - NIFTY 26300 CE

After adding the BUY contract, actual required margin will reduce compared to naked sell.

Can someone explain the logic of total margin calculation.

2

When you buy an option, this hedges your short option position and minimises the losses, due to this exchanges give margin benefits, which reduces the margin requirement.

3

@ShubhS9 Can you share the calculation logic for this.

I wanted to try with different HEDGE positions to see the % of profit for that required margin.

For ex:

  1. SELL NIFTY 26000 CE with hedge BUY NIFTY 26300 CE
  2. SELL NIFTY 26000 CE with hedge BUY NIFTY 26400 CE
  3. SELL NIFTY 26000 CE with hedge BUY NIFTY 26500 CE
4

Can someone explain the calculation logic of this?

5

Apologies for the delayed response. You don’t have to calculate the margins manually. You can use our margin calculator or use the Basket order feature on Kite to easily calculate the margins for any strategy.

You can also use Strategy builder on Sensibull, to check max P&L for option strategies and other details.

6

Is there any website or tool that provides a direct calculation of hedge premium costs (in percentage) for various months and strike prices? I want to avoid calculating it manually across multiple periods and strike prices. Specifically, I am looking to hedge for specific periods like elections, budgets, or during a downtrend.