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SPAN, or the Standardized Portfolio Analysis of Risk, is a risk management tool used in finance, particularly for managing futures and options. It assesses the potential risk of a portfolio by considering various market scenarios and the price movements of underlying assets. SPAN calculates margin requirements by evaluating the worst-case loss a portfolio could face over a specified time frame. This helps traders and investors ensure they hold enough capital to cover potential losses, enhancing financial stability and reducing the likelihood of default in volatile markets.