A ₹1 NIFTY option has to rise 73% before you make a single rupee

Indian option costs are dominated by a flat ₹20 per order, which doesn't care how small your trade is. We worked out the exact break-even move for every premium level and every index lot size — and the cheap OTM strike that feels like the safe way in turns out to carry the highest hurdle on the board.

Most arguments about buying cheap out-of-the-money options are moral ones. It's gambling. It's lottery tickets. Be disciplined. Fine, but nobody changes behaviour because a stranger called them undisciplined.

So here's the unmoralised version. Buy one lot of a NIFTY option trading at ₹1, hold it, sell it. Before you have made one rupee, that option has to rise 72.9%.

Not because the trade is reckless. Because of arithmetic you agreed to when you clicked buy.

This post works out the exact hurdle for every premium level, for every index, at every position size. All of it is just the published charge structure applied carefully — no opinions, no predictions. We checked each rate against the current exchange and broker schedules before writing any of it, because getting this wrong in the optimistic direction is exactly the mistake that makes cheap options look better than they are.

The one number that explains everything

An Indian discount broker charges a flat ₹20 per executed order on F&O. Not 0.03%. Not a percentage of anything. Twenty rupees, whether your position is worth ₹100 or ₹10,00,000.

A round trip is two orders. So every option trade starts ₹40 in the hole before a single statutory charge is added.

That fee is indifferent to your position size, which means its weight is entirely determined by your position size. On a ₹26,000 position, ₹40 is a rounding error. On a ₹65 position, ₹40 is most of the trade.

Everything below is a consequence of that one fact.

The break-even table

One lot of NIFTY (65 units), bought and sold, across premium levels. "Break-even" is the percentage the premium must rise just to return you to flat.

Look at the two ends. The ₹400 option needs a 0.42% move. The ₹1 option needs 72.85%. Same instrument, same exchange, same broker, same day — roughly a 175× difference in how far the market has to travel for you to break even.

And notice the third column barely moves. The whole cost range from ₹1 to ₹400 is ₹47 to ₹109. You are paying a little over twice as much to trade the expensive option, on a position four hundred times larger.

Where the money actually goes

It is worth seeing the breakdown, because the composition flips as premium rises.

On a ₹2 option, 84% of your bill is the flat fee. The statutory charges — STT, exchange turnover, stamp duty — are rounding errors, because they are percentages of a tiny number.

On a ₹400 option it is the reverse: brokerage is 37% and falling, and the percentage-based charges carry the rest. Those scale with the trade, which is exactly why they never create a hurdle problem. A percentage charge takes the same slice whatever you trade. A flat fee takes everything from a small trade and nothing from a large one.

This is why "cheap options are cheap to trade" is backwards. The rupee cost is flat. The proportional cost is brutal, and proportion is what your P&L is made of.

The twist nobody accounts for: lot size

Here is the part that surprises even experienced traders. Take the identical decision — buy one lot of a ₹5 option — and change only the index.

Same premium. Same intent. Same ₹47–49 of charges. The hurdle ranges from 8% to 47% — a 5.9× spread — purely because the exchanges set different lot sizes.

A ₹5 SENSEX option is a ₹100 position carrying ₹47 of costs. Nearly half your capital is consumed by fees before the market does anything at all. A ₹5 MIDCPNIFTY option is the same bet with an 8% hurdle, because the lot is six times larger.

Nobody chooses an index by lot size. But the lot size is quietly setting your cost of doing business, and the smallest-lot instruments are the ones where a cheap premium is most punishing.

"So I'll just buy more lots"

Scaling up does fix the arithmetic, and it is worth seeing how fast.

Twenty lots of the same ₹5 option drops the hurdle from 14.76% to 0.96% — about fifteen times better — and costs only about ₹15 more in total charges.

But read that honestly. You have not made the trade safer. You have taken twenty times the risk to make the fee structure tolerable. The ₹5 option still expires worthless most of the time; now it does so with ₹6,500 attached instead of ₹325.

That is the real trap in cheap options. The only way to fix the cost problem is to make the position big, and the only reason the position felt acceptable was that it was small. Those two facts are in direct conflict, and the resolution most traders reach — many small cheap trades — is the worst of both: the full hurdle, paid repeatedly.

Ten ₹5 NIFTY round trips in a week cost ₹480 in charges. You never had more than ₹325 at risk at any moment, but you put ₹3,250 through the market in total — so the charges come to 14.8% of everything you traded. Ten small bets do not share a cost; they each pay the full one.

The simplest way to hold all of this in your head

Every table above collapses into one number.

A NIFTY round trip costs ₹47–₹49 across almost the entire cheap-premium range. One lot is 65 units. So the premium has to move:

₹47 ÷ 65 = about 73 paise.

That is the whole cost structure. Not a percentage — 73 paise of premium movement, on every cheap NIFTY option trade you will ever place, regardless of strike, regardless of expiry.

The middle column is flat. The right column is not. That is the entire argument of this post in one table — the market has to give you the same 73 paise every time, and what changes is whether 73 paise is a rounding error or a doubling.

On a ₹0.50 option it is 145%: the premium must more than double for you to break even. That option cannot be traded profitably at one lot. Not rarely — structurally.

Why this matters most on expiry day

India trades weekly expiries, and on expiry afternoon the entire option chain migrates into exactly the zone where this is worst. Strikes that were ₹80 on Monday are ₹2 by Thursday afternoon. That is the attraction — cheap, fast, defined loss.

It is also the 36% hurdle.

Consider the typical expiry-day pattern: scalping one lot, small premiums, many round trips. Twenty trades at ₹3 a piece:

• Charges: ₹953
• Total turnover: ₹3,900
• Charges as a share of everything traded: 24.4%

A quarter of your traded value, gone to fees, before a single directional opinion is tested. For that session to break even, your gross trading edge has to beat 24.4% — and the honest answer for most people is that they have no idea whether their edge is 2% or 20%, because the cost never gets subtracted anywhere they can see it.

This is also why expiry-day losses feel inexplicable. Traders remember the direction calls, which may genuinely have been more right than wrong. They do not remember paying ₹47 twenty times.

Buying or selling — does it change?

Not in total. The same ₹5 NIFTY option costs ₹47.97 to round trip whether you bought it to open or sold it to open.

What changes is timing. STT falls on the sell leg, so:

• Buy to open: you pay STT on the way out.
• Sell to open: you pay STT on the way in.

For a short option position, part of the bill is deducted before the trade has done anything. It is a small amount at these premiums — ₹0.49 on a ₹5 option — but it is one more reason the figure in your contract note never quite matches the arithmetic you did in your head.

What this actually means

Three things fall out of the tables, none of which require an opinion about whether options are good or bad.

The hurdle is a property of the premium, not the strike. Traders think about distance from spot — how far out-of-the-money, how likely to land. The cost structure doesn't care. It cares what you paid. A ₹2 premium is a 36% hurdle whether it got there by being far OTM or by being near expiry on a quiet day.

Cheapness is not a risk control. The appeal of the ₹2 option is that you cannot lose much. True in rupees. But "I can only lose ₹130" and "I need a 36% move to break even" are the same sentence viewed from two ends, and only one of them gets said out loud.

Your cost per trade is roughly fixed, so your edge per trade has to clear it. Since nearly every option round trip costs ₹47–₹110 regardless of size, the question is never "are charges high?" It is "is this position big enough, and held for enough of a move, to be worth ₹50?" A trade targeting a 3% move on a ₹325 position is targeting ₹10 — on a trade that costs ₹48 to make.

Check it against your own contract note

Everything here is public arithmetic, and you should verify it rather than take our word for it. Open any option contract note and look for these:

• Brokerage — should be ₹20 per executed order. If a trade filled across three orders, you paid ₹60 on that leg, not ₹20, which makes every number above optimistic.
• STT — 0.15% of premium, charged on the sell side only. If you sold to open, you paid it on the way in.
• Exchange transaction charge — 0.03503% of premium turnover on NSE. SENSEX and BANKEX trade on BSE, which charges a slightly different rate; the SENSEX and BANKEX rows above use BSE's rate.
• SEBI turnover fee — ₹10 per crore. Genuinely negligible.
• Stamp duty — 0.003% on the buy side.
• GST — 18%, levied on brokerage + exchange + SEBI charges. Not on STT.

Three caveats on our figures. These are the rates in force since 1 April 2026, when STT on options premium rose from 0.1% to 0.15%; contract notes from before that date will show lower STT. Every table above assumes one order per leg — the friendliest possible case. Partial fills, averaging in, or scaling out all multiply the ₹20, and the hurdle rises with them. And an option you hold until it expires worthless has no exit order, so that losing trade pays ₹20 of brokerage rather than ₹40 — which changes nothing about break-even, because breaking even requires selling.

We build TradLyt to show traders what their own decisions actually cost, measured from their real trade history rather than estimated from a rate card. Charges are the least glamorous part of that and one of the most consistently underestimated — which is why we reconcile ours against broker-billed figures instead of trusting our own arithmetic.

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