SPAN Margin Calculator

Formula

The formula to calculate the SPAN Margin (SPM) is:

\[ SPM = TM - EM \]

Where:

$ SPM $ is the SPAN Margin ($)
$ TM $ is the Total Margin ($)
$ EM $ is the Exposure Margin ($)

What is SPAN Margin?

The SPAN Margin is a risk management tool used in the financial industry to determine the margin requirements for futures and options trading. It is calculated by subtracting the exposure margin from the total margin. This helps in assessing the potential risk and ensuring that sufficient funds are available to cover potential losses.

Example

Let's say the total margin (TM) is $10,000, and the exposure margin (EM) is $2,000. Using the formula:

\[ SPM = TM - EM = 10,000 - 2,000 = 8,000 \]

So, the SPAN Margin (SPM) is $8,000.