how to calculate nifty banknifty F&O margin, profit-loss ?

Nifty and banknifty are major market indices. Nifty is India’s major 50 stock index and gives generalized idea about major market movement and performance.

While banknifty is the 12 most liquid and large capitalized stocks from the banking sector which trade on the National Stock Exchange (NSE). It provides investors and market intermediaries a benchmark that captures the capital market performance of Indian banking sector.

Nifty and banknifty can be traded in derivative segments. And called as index futures and index options respectively.

Nifty bank nifty lot size information

 

National Stock Exchange (NSE) has announced revision in the market lot of derivatives contracts on some its key indices. The lot size of CNX Nifty in the futures & options (F&O) segment has been revised upwards to 75 from the current 25.

While the lot size of Banknifty in the futures & options (F&O) segment has been revised upwards to 40 from the current 25. The price step in respect of CNX Nifty banknifty futures and options contracts is Re.0.05

As part of a periodic review, the National Stock Exchange (NSE) announces revision in the market lot of derivatives contracts on some its key indices.

Nifty bank nifty margin and profit loss calculation

 

Nifty future current lot size is 75 quantities. And nifty future current trading price is 9800. If any traders take long positions in nifty future at 9800 with stop loss of 9750 and for target 9900.

 

Then its nifty future margin will be calculated like this:

Nifty current price 9800 * current lot size 75 = 7, 35, 000/- is total value of 1 future contract. Currently exchange set 8% margin for nifty future contract so money required to buy or sell 1 nifty future lot will be 8% of 7, 35,000/- which comes at 58,800/- rupees.

 

In nifty options, traders have to pay only premium amount, there will be no margin situation in buying nifty options but for selling nifty options, traders have to pay nifty future margin plus nifty premium.

 

For example, nifty 9800 call option is trading at 100 rupee so to buy 1 lot of nifty 9800 call option, traders have to pay = nifty options premium 100 rupee * 75 quantity lot size = 7500 rupees.

 

To sell same nifty option contract, traders have to pay around = nifty future margin of 58,800/- plus 7500 rupee premium amount = 66,300/- rupees.

 

Nifty future profit loss will be calculated like this:

 

Nifty future buy call 9800 to 9900 minted profit +100 points and its 1 point is equivalent to 75 rupee. So if nifty buy position achieves target of 9900 then trader will earn profit 100 points * 75 quantity lot size = 7500 rupees per lot. If traders stop loss hit at 9750 then it will face loss of 50 points * 75 quantity lot size = 3750 rupees per lot. Same can be applied for nifty options.

 

Bank Nifty margin and profit loss calculation

 

Banknifty future margin will be calculated like this:

 

Bank Nifty current price 23600 * current lot size 40 = 9, 44,000/- is total value of 1 future contract. Currently exchange set 8% margin for bank nifty future contract so money required to buy or sell 1 bank nifty future lot will be 8% of 9, 44,000/- which comes at +75,520/- rupees.

Banknifty profit loss will be calculated like this:

 

Bank Nifty future current lot size is 40 quantities. And banknifty future current trading price is 23600. If any traders take long positions in banknifty future at 23600 with stop loss of 23500 and for target 23800.

 

Banknifty future buy call 23600 to 23800 minted profit +200 points and its 1 point is equivalent to 40 rupee. So if banknifty buy position achieves target of 23800 then trader will earn profit 200 points * 40 quantity lot size = 8000 rupees per lot. If traders stop loss hit at 23500 then it will face loss of 100 points * 40 quantity lot size = 4000 rupees per lot.

 

 

In banknifty options, traders have to pay only premium amount, there will be no margin situation in buying banknifty options but for selling banknifty options, traders have to pay banknifty future margin plus banknifty options premium.

 

For example, banknifty 23600 call option is trading at 200 rupee so to buy 1 lot of banknifty 23600 call option, traders have to pay = banknifty option premium 200 rupee * 40 quantity lot size = 8000 rupees.

 

To sell same banknifty option contract, traders have to pay around = banknifty future margin of 75,000/- plus 8000 rupee premium amount = around 83,000/- rupees.

 

I hope this will clear some nifty banknifty future and option trading basic question and queries from new comers and amateur trader’s mind.

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The Author

Pramod Baviskar

Professional Market Trader And Owner Of Dalal Street Winners Advisory And Coaching Services. Working Since 2007 And Online Presence Since 2010. We Provide Highly Accurate And Professional 1 Entry And 1 Exit Future, Option, Commodity, Currency And Intraday Stock Tips On Whatsapp With Live Support And Follow Up.

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