Short straddle on Bank Nifty
Sell an at-the-money call and an at-the-money put. You collect two premiums and lose if the index moves far either way. The loss is not capped. Shown per lot of 30 with illustrative numbers.
Contract basics. Bank Nifty lot size: 30. Bank Nifty has monthly options only (last Tuesday of the month), so this example uses 25 days to expiry. Strikes in this example are rounded to the 100-point strike interval.
A structure for a view that the index will barely move until expiry. It carries unlimited risk on the upside and very large risk on the downside.
| Leg | Premium per unit | Cash flow |
|---|---|---|
| Sell 1 lot 55,000 CE | ₹1,044.02 | +₹31,320 |
| Sell 1 lot 55,000 PE | ₹799.70 | +₹23,991 |
Profit and loss at expiry
For the whole position, before charges.
Premiums are theoretical Black–Scholes values from round, illustrative inputs, not market prices. Charges and margin are not included.Price a single leg with your own numbers.
Frequently asked questions
What is the maximum loss of a short straddle on Bank Nifty?
The loss is not capped. In this illustrative example the position collects ₹55,311 but can lose far more if Bank Nifty moves sharply.
What is the lot size of Bank Nifty options?
30 units per lot at the time of writing. Lot sizes are revised by the exchange from time to time; check the current size before trading.
When do Bank Nifty options expire?
Bank Nifty has monthly options only (last Tuesday of the month), so this example uses 25 days to expiry.
Is a short straddle risky?
Yes. The profit is capped at the premium received, while the loss is unlimited on the upside and can be very large on the downside.
How much margin does a short straddle need?
Margin for two naked short options, often several lakh rupees per lot on index options. It changes with volatility; check your broker's margin calculator.