What is SPAN margin and Exposure margin and how are they different?

SPAN and Exposure are the two components that make up the total margin required for F&O positions.

Margin Type	What it is	Who sets it
SPAN (Standard Portfolio Analysis of Risk)	The minimum margin required to hold an F&O position. SPAN uses a risk model developed by the Chicago Mercantile Exchange (CME) and adopted by Indian exchanges. It calculates potential losses across a range of price and volatility scenarios and sets the margin at a level that covers the worst expected loss over a single day.	Exchange (NSE/BSE/MCX) — updated daily
Exposure Margin (ELM)	An additional margin charged on top of SPAN to provide a buffer for risks not captured by SPAN, such as large intraday moves, news-driven gaps, or tail risk. It is typically a percentage of the contract's notional value or of SPAN.	Exchange — updated periodically
Total Margin Required	SPAN + Exposure Margin. This is the amount blocked in your account to hold the position.

Example:

If SPAN for a Nifty Futures position is ₹60,000 and the Exposure Margin is ₹30,000, your total margin blocked is ₹90,000. You need at least ₹90,000 available in your account to enter or maintain this position.

Note: On expiry day, an additional 2% margin is levied on short index option positions carried forward, as per SEBI's risk management guidelines. This is collected before 9:00 AM on expiry day.