What are VAR+ELM+Adhoc?

What are VAR+ELM+Adhoc?

When you trade in the equity cash segment on FYERS, certain mandatory margins are applied to safeguard against price volatility and potential loss. These include VAR, ELM, and sometimes Ad hoc margins. Here’s a simple breakdown of what each term means.

What is VAR?

Value At Risk (VAR) is the core risk margin charged on a stock. It reflects the potential one-day loss a trader could face due to normal market movements. The exchange determines VAR for each security based on its price volatility.

  • For liquid stocks, VAR is calculated for 1 day.
  • For illiquid stocks, VAR is calculated for 3 days to cover increased risk.

What is ELM?

Extreme Loss Margin (ELM) is an additional buffer applied over and above the VAR. It accounts for extreme price movements not captured in normal VAR calculations. ELM is a safety cushion and is applicable to all trades in the cash market.

What is Ad hoc margin?

Ad hoc margin is a special or temporary margin imposed on certain stocks. It is decided by the exchange or the broker based on the nature or risk profile of a security—such as surveillance actions, price manipulation alerts, or low liquidity concerns.

What If...

ScenarioExplanation
I see a higher margin requirement than expectedIt could be due to ELM or Ad hoc margins added to the base VAR.
I want to know margin details for a stockYou can use FYERS Web order window or the NSE margin calculator to view applicable VAR+ELM.
A stock is under surveillanceAd hoc margins may be applied to limit risk or volatility for that scrip.
Always check the total margin (VAR + ELM + Ad hoc) before placing an order, especially in stocks flagged for additional risk by exchanges.

Last updated: 28 Jun 2025