How Much Margin Is Needed for Futures Trading in India

Short answer: You need to deposit a margin set by the exchange, made up of SPAN plus exposure margin, which is typically a meaningful percentage of the contract's total value and varies by stock or index volatility.

How Margin Works

Futures let you control a large contract value by depositing only a fraction as margin. This margin is collateral, not the full cost. The exchange (and your broker) require it to cover potential adverse moves, and it is adjusted daily as prices change.

SPAN and Exposure Margin

The total upfront margin is broadly the SPAN margin (calculated from a risk model based on volatility) plus an additional exposure margin. Together these form the minimum you must have to take a futures position. More volatile underlyings carry higher margins.

It Varies by Contract

There is no single fixed percentage. Index futures usually require less margin as a share of value than volatile single-stock futures. SEBI and the exchanges set and revise these requirements, and brokers may ask for more, so always check the live margin for your specific contract.

Mark-to-Market and Margin Calls

Futures positions are settled daily based on price changes. Losses are debited from your account each day, and if your balance falls below the required level, you face a margin call and must add funds or your position may be squared off.

Why Leverage Is Dangerous

Because you pay only a fraction upfront, a small adverse move in the underlying can wipe out a large part of your margin. Leverage magnifies both gains and losses, which is why futures are riskier than buying the underlying outright.

Practical Tips

Keep a buffer well above the minimum margin to avoid forced square-offs, use brokers' margin calculators before trading, and size positions so that a normal adverse move does not threaten your account. Never trade futures with money you cannot afford to lose.

This explainer was written by The Dispatch desk to answer a question readers commonly ask. It is general information, not personalised financial advice.