--- title: "How do I hedge a stock portfolio with Nifty puts, and how" description: "The number of Nifty puts that offsets a stock portfolio is its value times its beta, divided by the value of one Nifty lot." source_url: "https://www.rupeecase.com/learn/questions/hedge-portfolio-with-nifty-puts" --- A put bought below the index sets a floor, and its premium is the price of that floor Profit and loss at expiry for one lot of a long future with a put bought below it, priced at the settle prices of 10 Jun 2026. The put's premium is the cost of protection above its strike. Source: NSE end of day data, computed by RupeeCase. As of 10 Jun 2026. 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](https://www.sebi.gov.in/reports-and-statistics/research/aug-2026/study-profitability-of-individual-traders-in-the-equity-derivatives-segment-fy25-fy26-_103835.html) How do I hedge a stock portfolio with Nifty puts, and how many lots?The number of Nifty puts that offsets a stock portfolio is its value times its beta, divided by the value of one Nifty lot, and the premium is the cost of the floor. The hedge covers the market part of the risk and leaves stock specific risk and the basis unhedged. LGo deeper ## Where Learn teaches this. [Go deeperCovered call, protective put and cash secured put8 min, Beginner](/learn/path-17/module-17-3-covered-call-and-protective-put)[Go deeperHedging a stock portfolio with Nifty puts9 min, Intermediate](/learn/path-17/module-17-13-hedging-with-nifty-puts)[Try itHedge calculatorFutures and put lots for a sample portfolio, and what the cover costs.](/learn/tools/hedge-calculator) SSources ## Go to the source. 3 sources, NSE the most cited The publisher of each source listed below. Source: Module undefined source list. 1. [NSE option chain page (this page reads dated end of day files only)](https://www.nseindia.com/option-chain) NSE 2. [NSE, equity derivatives contract specifications (expiry cycle, lot size and strike rules)](https://www.nseindia.com/static/products-services/equity-derivatives-contract-specifications) NSE 3. [SEBI investor education, Understanding derivatives](https://investor.sebi.gov.in/understanding_derivatives.html) SEBI ?Questions people ask ## Related questions. 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Scan the code, fillFill one short form, and join my WhatsApp group. Slides, sources, factsheets and the rebalance logs live there, and members join a daily Google Meet with me. New to RupeeCase? [Getting started](/getting-started) [See the terminal](/terminal) [Sign up for RupeeCase](https://invest.rupeecase.com/signup) [Join the WhatsApp group](https://forms.gle/C6HMtM1Z2GfeocQV7) [One form, one group](https://forms.gle/C6HMtM1Z2GfeocQV7)Scan with your phone camera Education only, not investment advice, a research report or a recommendation to buy, sell or hold any security. RupeeCase (QC Alpha Technologies Pvt Ltd) is not registered with SEBI as an investment adviser or research analyst. Contracts and prices shown are for illustration only, come from NSE end of day files at least 30 days old, and are not recommendatory. Derivatives trading carries a high risk of loss.