Before any position is sized, five lines have to be copied off the exchange's own page, with the date they were read. Multiplier or lot size. Tick and tick value. Expiry date and expiry time. Settlement style, meaning cash or physical. Exercise style, meaning European or American. A hedge sized without those five is a guess with a spreadsheet attached.
Take the Nifty 50 index contract as the worked case. With the index at 24,800.00 and a lot of 75 units (the lot from November 2024 to December 2025, which this module's worked figures keep for continuity; see the check flag below), one lot carries ₹18,60,000 of notional. The tick is 0.05 index points, so the smallest price change on the screen is worth ₹3.75 per lot. Against that, the E-mini S&P 500 has no lot size at all: it has a multiplier of $50, so at 5,866.00 the contract carries $293,300 of notional and its 0.25-point tick is worth $12.50. At a rupee rate of 86.40 the American contract is 13.6 times the size of the Indian one, which is why a small US account reaches for the Micro E-mini rather than the standard one.
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Why does the Nifty lot size change?
The lot of 75 is the perishable number, and it is worth pausing on how perishable. India's market regulator raised the minimum notional value of an index derivatives contract to ₹15 lakh in a package announced in October 2024 and phased from 20 November 2024. The exchange responded by raising the Nifty lot from 25 units to 75. At 24,800 the new lot carries ₹18.60 lakh, comfortably over the floor; at an index level of 19,000 it would carry ₹14.25 lakh and the lot would have to move again. The exchange's semi-annual revision then cut the lot to 65 from the January 2026 contracts (the same revision the options-pricing module cites), so at 24,800 a lot now carries ₹16.12 lakh and a tick is worth ₹3.25. Verify flag: the Nifty lot size is exchange-set and revised by circular. It was 75 from November 2024 and is 65 from January 2026 (as of October 2026). The worked examples on the module page keep 75 so their arithmetic can be followed; scale them by 65/75 for a current lot. Read the current figure off the contract-specification page on nseindia.com and record the date before sizing anything. Everything downstream, the margin, the hedge ratio, the tax turnover, is proportional to it.
The same caution applies to every parameter on the page and to several that are not on it. Expiry weekday has changed more than once in India in recent years. Minimum contract size is set by regulation. The transaction charge is set by the exchange and the securities transaction tax by Parliament. Treat the specification page as a data feed you re-read, not as a fact you learned.
One habit is worth installing now, because it costs nothing and catches the most expensive class of error. Write the unit at every step. Not "78.20" but "₹78.20 per share"; not "1,200" but "1,200 shares, being 2 lots of 600". Multiplier errors and lot errors do not look wrong on the page, and they are the most common real-world derivatives mistake at every level of experience.
A figure carrying no unit has not been checked, only written down.
India settles single-stock derivatives in shares, and this changes what winning means
Since the October 2019 expiry, every single-stock futures and options contract on the Indian exchanges settles by physical delivery. There is no cash-settlement election. An in-the-money long call at expiry means you buy the shares at the strike; an in-the-money long put means you deliver shares at the strike; the short sides do the opposite. Index derivatives remain European and cash-settled, so the two halves of the same segment behave completely differently on the same expiry afternoon.
State this precisely, because it is one of the most commonly misdescribed facts in Indian market writing, and some otherwise careful sources still call Indian single-stock options cash-settled. They are European in exercise style, meaning they cannot be exercised early. They are physical in settlement style, meaning that if they finish in the money they turn into a delivery obligation whether or not you wanted one. European and cash-settled are two different properties and only the first is true here.
What does physical settlement mean for a buyer?
The consequence for a buyer is a step change in the capital required. The Pune trader in the module's opening paid ₹34,200 for exposure and finished with a ₹16,80,000 payment obligation, a ratio of 49.1 to 1. He had a profitable position the whole way. What he lacked, if he lacked anything, was ₹16.8 lakh of settled funds on the settlement date and the delivery margin blocked in the days before it. For a seller of an in-the-money call, the obligation is worse in kind rather than degree: he must deliver shares he may not own, and a failure to deliver goes to a buy-in auction whose close-out formula is priced in option exercise and assignment.
The exchange does not wait until expiry to ask for this. It ramps.