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SPAN margin is the risk-based collateral NSE requires from anyone selling options or holding futures — the reason option selling ties up far more capital than the premium collected alone would suggest.

Note on the figures below: SPAN margin is computed by the exchange's own risk engine and changes daily with volatility, expiry proximity, and market events. The numbers on this page are realistic, sourced ballpark figures for illustration, not a precise calculation — always check your broker's live margin calculator before placing a real trade.

SPAN stands for Standardized Portfolio Analysis of Risk. NSE Clearing runs every trader's portfolio against a fixed grid of scenarios — a range of possible price moves combined with a range of possible volatility changes — and calculates the worst-case one-day loss across that whole grid. SPAN margin is set to cover that worst case, not just today's actual position value. This is why buying an option requires no SPAN margin at all (the most you can lose is the premium already paid, capped and known upfront), while selling an option requires substantial SPAN margin (the potential loss is large, and the exchange needs collateral to cover it).

Total margin required is generally SPAN margin plus a second component:

• SPAN margin — the core, scenario-based risk requirement described above.
• Exposure margin — an additional buffer on top, typically a percentage of the contract's notional value, meant to cover risk beyond SPAN's own worst-case scenario grid.

Both are blocked together the moment a margin-requiring position is opened, and released when the position is closed — margin is collateral held against the position, not a fee or a cost by itself. What you actually pay out are brokerage, taxes like STT, and any real loss if the trade moves against you.

This is the single most useful practical fact about SPAN margin — how dramatically it drops once a position is hedged, rather than naked. Using representative figures for one Nifty option lot (65):

Taking ₹120,000 as a representative naked figure, the hedged version at roughly ₹28,000 represents about a 4.3× reduction in required capital — the same short strike, but with a long option purchased above (or below) it capping the worst-case loss, which is exactly why SEBI's margin framework allows dramatically less collateral for defined-risk positions.

• This is a major reason spreads and condors exist, beyond just capping max loss — an Iron Condor or Bull Call Spread ties up dramatically less capital than the equivalent naked short positions would, for a comparable (if smaller) premium collected.
• Naked strategies like a standalone Short Call or Short Put require the most margin per lot of any strategy on this site, reflecting their genuinely larger risk.
• Margin requirements spike around known events — Budget day, RBI policy announcements, and expiry day itself commonly see SPAN margin rise sharply as the exchange's risk scenarios widen, worth planning for if holding positions through those dates.

• Margin can rise intraday, and under SEBI's peak margin rules, the full required margin must be maintained throughout the trading day, not just at day's end — a shortfall at any point can trigger a penalty.
• The premium collected on a short option is often a small fraction of the margin blocked to hold it — a real, important ratio to understand before sizing a position, since it means a modest premium can require a surprisingly large capital commitment.
• These figures are illustrative and change daily — always check your broker's live SPAN calculator for the actual current requirement before placing a real trade.