Position sizing against your capital

Margin is not risk: how to read the worst cycle on record against your own capital before choosing how many lots to trade.

For a short option the margin blocked is a fraction of what a bad day can cost. Margin is set from the exchange's risk scenarios for a normal day; the losses that hurt come on the days that are not normal.

A practical way to size is to start from the worst outcome you are prepared to see in one trade — a percentage of your capital — and divide it by the worst loss per lot that the structure has produced. The calculator below does that arithmetic with Arthfy's history; the choice of percentage is yours.

Your capital against the worst cycle on record

Structure

Your capital

₹

Largest loss you accept on one trade

% of capital

Worst cycle and P5 (the 5th-percentile cycle) are per lot at that cycle's lot size, net of charges, held to expiry, from Arthfy's history since 2016. The worst on record is not the worst possible. The inputs are yours; nothing here is a recommendation.

Rupee figures use each cycle's own lot size, and NIFTY's lot has been 75, 50, 25, 75 and 65 since 2016. The before/after 20 November 2024 columns help separate the eras.

Live: margin and charges of a NIFTY short strangle against your saved capital

Runs on today's NIFTY chain with Arthfy's pre-trade check. Free with an Arthfy account.

Try it in the F&O hub

Opens the tool with this structure on today's NIFTY chain. Reading is free with an Arthfy account; some runs use free attempts.

Open a short strangle in the builderThe pre-trade check shows margin as a % of your capital

Practise sizing with paper tradingFree, no money at risk

Straddles & strangles

Short strangle

Condors & iron butterflies

Iron condor

Lesson

Adjustments: rolling, hedging and closing early

For education: how the structure works and what it did historically, not a recommendation to trade it.