How do you calculate margin requirements on futures and futures options?

Futures options, as well as futures margins, are governed by the exchange through a calculation algorithm known as SPAN margining. The Standard Portfolio Analysis of Risk system is a highly sophisticated methodology that calculates performance bond requirements by analyzing the "what-ifs" of virtually any market scenario. For information on SPAN and how it works, please visit the CME Group website. From there you can run a search for SPAN, which will take you to a wealth of information on the subject and how it works.

In addition to the exchange scanning ranges, we will consider more scenarios which incorporate extreme moves in the underlying. Accordingly, we may need margin over and above the exchange-mandated margin on short options in order to account for the risk inherent in an extreme market move. You can view the current projected margin requirements on a certain option or futures order that you are considering before you submit the order by creating the order in our trading platform and using the right-click menu to "Check Margin" before you transmit.

Please review MEXEM's webpage for the list of margin requirements for futures.

Please note: Margin rates in an IRA margin account may meet or exceed three times the overnight futures margin requirement imposed in a non-IRA margin account. Cash accounts and IRA accounts (both cash and margin type) are not afforded Intraday margin rates.

See also: When does the Intraday margin for futures change to Overnight margin?

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