Higher the volatility, higher the margins required. This is done with the help of a margin calculator.Ī margin calculator is an online tool that calculates the margin required for a particular trade, taking into account several factors such as time, price and volatility. Knowing how much margin is required to be maintained is essential before placing an F&O order. Margins are fixed by exchanges in order to safeguard stockbrokers when traders experience losses. The margins are different from profit or losses. Margins are required to be paid by both the Long and Short position holders. This is similar to the money that needs to be deposited with the landlord before we rent a property so that in case the tenant defaults in payment, it can be deducted from the deposit amount. The margin acts as a security deposit and helps to prevent counter-party risk in case of default. Margin is an amount that a trader has to deposit with the stock broker before buying or selling derivatives like Futures & Options (F&O). However, What is a margin calculator?, What is a profit calculator? How are they different from one another? In this article, we will understand these two financial calculators in detail. These online tools provide accurate results instantaneously upon inputting certain data thereby saving significant time of traders on complex analysis. Margin calculator and profit calculator are both financial tools designed for traders and investors to take quick, error-free and informed decisions pertaining to their trades. As time is crucial, calculating brokerages, margin,s or net profit manually every time before the trade is tedious and time-consuming.
Every second is crucial when placing a buy or sell order. If you are a stock trader, then nobody understands the importance of time better than you. Difference between Margin calculator and Profit calculator.How is stock profit or loss calculated?.Check our Video on Span Margin Calculator.
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