How the margin is calculated
Contract value is the underlying reference price multiplied by contract quantity. It is the base for the percentage calculations, not an additional margin charge.
Market Rush applies an internally calculated volatility-based risk percentage to that contract value, then adds exposure margin using the applicable exposure percentage. A further strike-distance adjustment reflects the option strike relative to the underlying reference level. These are components of Market Rush's evaluation risk model, not a direct copy of exchange SPAN.
Example: NIFTY 25250 PE
This illustrative example uses quantity 65, NIFTY spot ₹25,255, annualised historical volatility of approximately 17.07%, a volatility-based risk rate of 14.0005% and an exposure margin rate of 2%. Those risk inputs describe this scenario; they are not fixed rates for every option or session.
The volatility-based estimate is part of Market Rush's internal risk calculation. It does not directly reproduce exchange SPAN.
Illustrative margin breakdown
| Margin component | Amount |
|---|---|
| Contract value (reference base: ₹25,255 × 65) | ₹16,41,575.00 |
| Volatility-based risk estimate (14.0005%) | ₹2,29,828.71 |
| Exposure margin (2%) | ₹32,831.50 |
| Strike-distance adjustment | ₹10.40 |
| Total required margin | ₹2,62,670.61 |
The contract value is the reference base, not an amount added to margin. ₹2,29,828.71 + ₹32,831.50 + ₹10.40 = ₹2,62,670.61.
Why can the required margin change?
Margin can change with market conditions, contract characteristics, volatility and the risk parameters applicable at the time of evaluation. The example explains one scenario and may not match the requirement shown on another day.
Does hedging affect the required margin?
Yes. Market Rush supports unhedged and hedged option-selling strategies. Eligible hedged positions may benefit from margin optimisation because their risk profile differs. The effect depends on the positions and the platform's risk model; not every multi-leg structure receives a reduction. Check the actual requirement in the evaluation interface.
Why might Market Rush show a different margin?
Market Rush uses its own volatility-based evaluation risk framework. Its requirements are not intended to replicate every broker or platform. A difference by itself does not mean the calculation is incorrect or that option selling is restricted.