Nifty Futures Explained: Lot Size, Expiry, Margin and Strategy
One trade, all 50 stocks. How Nifty futures work, what the premium whispers about sentiment, and the three rules that keep leveraged traders alive.
Nifty futures are contracts to buy or sell the Nifty 50 at a fixed price on a fixed date. The lot size is 65 units from January 2026. Contracts run monthly and expire on the last Tuesday of the month. With the index at 25,000, one lot controls about ₹16.25 lakh of exposure for a margin that is only a fraction of that. Leverage cuts both ways, and daily mark-to-market makes every losing day a real cash outflow.
What Are Nifty Futures?
A Nifty future is a deal struck today at a price for the Nifty 50 on a future date. Buy a future, and the position gains when the index rises. Sell one first, and it gains when the index falls. No shares change hands. The contract settles in cash against the index value.
This is the simplest way to trade the whole market in one shot. One trade carries a view on all 50 stocks. There are no strikes to choose and no time decay to fight, the two things that complicate options.
Contract Basics, as of June 2026
- Lot size: 65 units. The current sizes for every index are in this F&O lot size guide.
- Expiry: last Tuesday of the month. NSE shifted expiry from Thursday to Tuesday in September 2025.
- Three series at a time. Near month, next month, and far month trade together. Almost all volume sits in the near month.
- Cash settled. Open positions at expiry settle against the closing index value.
A worked example: with Nifty at 25,000, one lot is 65 × 25,000 = ₹16.25 lakh of exposure. The exchange asks for a margin upfront, a fraction of that value, and recalculates the account every evening.
Mark-to-Market: The Daily Reckoning
Futures profits and losses are settled every single day. If the index falls 100 points against a long position, 65 × 100 = ₹6,500 leaves the account that evening. The position has not closed; the loss is still real cash. Traders who do not keep spare margin get cut down by this mechanism in fast markets, not by the direction call itself.
Premium, Discount and What They Whisper
The future usually trades a few points above the spot index. That gap is the cost of carry, roughly the interest saved by paying margin instead of buying all 50 stocks. The gap itself is a sentiment tell:
- Fat premium — traders are paying up to be long. Optimism, sometimes too much of it.
- Discount — the future below spot. Fear or heavy hedging, often near bottoms.
Rollover data adds colour. Near expiry, positions shift to the next month. A high rollover with rising prices says conviction is travelling forward. A weak rollover says traders are letting the trade die.
Who Uses Nifty Futures, and How
- Directional traders ride index trends with leverage, pairing entries with the discipline in this intraday trading guide.
- Hedgers sell futures against a stock portfolio before events, freezing market risk without selling holdings.
- Arbitrageurs trade the spot-future gap when it stretches beyond the cost of carry.
Many traders also read futures data alongside the option chain: futures show the market's direction bets, options show where the walls stand. Expiry sessions have their own rhythm, covered in this expiry-day guide.
Three Rules Veterans Never Break
1. Size by exposure, not margin. The margin may be a few lakh, but the position is ₹16 lakh. A 2% index move is ₹32,500 per lot. Position size must assume that the move happens tomorrow.
2. Keep a margin buffer. Exchanges raise margins in volatile weeks, and MTM losses drain the account daily. Veterans park 30-40% extra above the required margin.
3. Respect the calendar. Expiry Tuesdays and event days change how futures behave. Carrying a leveraged position blind through an RBI meeting or a budget is a choice, and it should be a conscious one.
Sources: NSE equity derivatives contract specifications. Contract details as of June 2026; index level in examples is illustrative.