A put bought below the index sets a floor, and its premium is the price of that floor
Start with the exposure. A portfolio of large stocks moves with Nifty in proportion to its beta. Multiply the portfolio value by the beta to get the index exposure in rupees, then divide by the value of one Nifty lot, which is the index level times the lot size, 65 units on the 10 Jun 2026 chain.
The put strike sets the floor. A put bought below the index pays once the index falls under that strike, so the loss on the hedged part is limited to the distance down to the floor, plus the premium paid. The chart shows a long future with a put bought below it on the 30 Jun 2026 chain, which is the index exposure and its floor.
The premium is the cost. Puts lose time value as expiry nears, so a hedge rolled each month pays that decay every month, whether or not the index falls. Compare that cost with the loss the floor prevents, using the same dated chain for both.
The hedge covers the market part only. A stock can fall while the index holds, and the put does not pay for that. The gap between a portfolio and the index is the basis, and a portfolio with low correlation to Nifty leaves much of its risk unhedged.
Every figure here comes from a dated chain. The hedge calculator shows the lot count, the premium and the floor for a chosen preset, with a table of beta errors, using NSE end of day data only.
Before you trade. Derivatives trading carries a high risk of loss. SEBI's study "Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26)" (August 2026) found that 87.7% of individual traders in equity F&O made net losses in FY26, with aggregate net losses of Rs 91,685 crore. Read the SEBI study