SPAN Margin

SPAN Margin

Standardized Portfolio Analysis of Risk Margin. A system of determining the appropriate amount of margin on an option or futures trader's account in order to cover potential losses from his/her trades. Options and futures traders are required to maintain a certain margin on their positions to reduce the risk of failing to settle. The SPAN margin uses a complex system of algorithms to calculate the margin for each position that a trader holds and transfer excess margin from some positions to cover the margin that is lacking for others. Most options and futures exchanges require their traders to use the SPAN margin.
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Eris Standards are cleared by CME Clearing using the SPAN margin methodology.