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Lot sizes, margin and leverage: why F&O cuts both ways
Beginner · 6 min read
Futures and options trade in fixed lots set by the exchange — for example 65 units for a Nifty 50 contract and 30 for Bank Nifty as of October 2026. Lot sizes are revised from time to time, so always check your broker's contract details.
Leverage
A futures position is worth the full lot × price, but the broker blocks only a margin, a fraction of that value. A 1% move in the underlying can therefore be a much larger percentage gain or loss on the margin you put up. Options buyers pay only the premium, but that premium can fall to zero quickly.
What SEBI found
SEBI's study of individual traders in equity F&O, published in September 2024, found that about 93% of over one crore individual traders lost money between FY2022 and FY2024, with average losses of around ₹2 lakh per trader including transaction costs. SEBI has since tightened the rules — larger minimum contract sizes and fewer weekly expiries among them.
This is not a reason to never trade derivatives; it is a reason to treat them as the riskiest thing in the market, size every position from its stop-loss (the 1% rule), and count every cost.