Options Strategy
Long Put - Nifty 50
Buy a put option expecting Nifty to fall below the strike price before expiry. Your maximum loss is the premium paid; profit grows as Nifty falls.
Max Loss
₹28,125
Premium paid (per lot)
Breakeven
23,625
Strike − Premium
Max Profit
₹1,74,375
If Nifty falls to zero
Adjust your trade parameters
Below breakeven
Every point Nifty falls = ₹75 profit per lot. More the fall, more the gain.
At breakeven
Strike − Premium = no profit, no loss. The drop just covers your cost.
Above strike
Option expires worthless. You lose only the premium paid — nothing more.
How to execute on NSE
1
Open your broker's options chain for Nifty 50 and select the desired expiry (weekly or monthly).
2
Pick a Put option at your target strike. ATM puts give the best balance of cost vs sensitivity to downside moves.
3
BUY the put. Your total debit = Premium × 75 (lot size). This is your maximum risk on the trade.
4
Monitor closely. Exit before expiry to capture remaining time value, or hold for full cash settlement on expiry day.
Key risks to know
Time decay (Theta): Every passing day erodes the put's value even if Nifty stays flat or drifts slightly lower.
Volatility crush: A drop in implied volatility after a big event (budget, RBI policy) can reduce profit even if Nifty falls as expected.
Move required: Nifty must close below the breakeven at expiry. Falling to the strike alone is not enough to recover your premium.
Long Put vs Short Future: A long put limits your loss to the premium unlike shorting futures which carries unlimited loss potential.