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Short Future with Protective Call

What Short Future with Protective Call is

This NIFTY trade sells 1 lot of futures and buys 1 lot of calls, with ₹26,467.50 paid in net option premium.

Before charges, it makes money at expiry below 25,177.45.

The most it can lose is ₹24,191.25 before charges.

Do it, see why, prove it

Practise the basket on the desk, then check what you learned with the options questions.

Try it on the desk →

The lessons

BearishIdeal for A sharp fall

A past weekEntered at the close on 3 Jul 2025. NIFTY was 25,405.3. First expiry 31 Jul 2025, 28 days later.

At 25,100 on 31 Jul 2025: +₹5,808.75Before charges · Before expiry: +₹12,731.20

25,100
At expiry · Before charges+₹5,808.75
Before expiryAt expiryResult that week

Most you can lose

−₹24,191.25Before charges

Breakeven

25,177.45Before charges

Most you can make

₹18,88,308.75Before charges

Charges to enter

₹485.68

What happened that week

+₹30,682.50 · 1 lot · Before charges

NIFTY 31 Jul 2025 · 24,768.35

On this day 1 lot was 75. It is 65 now.

Before charges

  1. ₹0.003 JulEntry25,405.3
  2. −₹2,295.004 JulClose25,461
  3. −₹1,616.257 JulClose25,461.3
  4. −₹4,995.008 JulClose25,522.5
  5. −₹3,963.759 JulClose25,476.1
  6. −₹2,538.7510 JulClose25,355.25
  7. +₹7,683.7511 JulClose25,149.85
  8. +₹10,950.0014 JulClose25,082.3
  9. +₹3,851.2515 JulClose25,195.8
  10. +₹2,647.5016 JulClose25,212.05
  11. +₹6,547.5017 JulClose25,111.45
  12. +₹15,022.5018 JulClose24,968.4
  13. +₹7,623.7521 JulClose25,090.7
  14. +₹8,756.2522 JulClose25,060.9
  15. −₹1,455.0023 JulClose25,219.9
  16. +₹8,141.2524 JulClose25,062.1
  17. +₹23,985.0025 JulClose24,837
  18. +₹36,405.0028 JulClose24,680.9
  19. +₹26,257.5029 JulClose24,821.1
  20. +₹24,007.5030 JulClose24,855.05
  21. +₹30,682.5031 JulExpiry24,768.35

How to read the chart

The solid line shows the value before expiry. The dashed line shows the first expiry date. Green is profit. Red is loss. The orange ring is the result that week.

24,311.05–24,869.92 · Before charges
24,869.92–25,428.78 · Before charges
25,428.78–25,987.65 · Before charges

Read the true maximum loss above the chart. Check each leg's before using a basket.

What time changes

An option loses its as expiry gets closer. Keep the index still and move the time slider. A later expiry still has time left when the front leg settles.

NIFTY 25,405.3 · Before charges

  1. 3 Jul₹0.0028 days left
  2. 9 Jul−₹1,865.5822 days left
  3. 15 Jul−₹4,137.9116 days left
  4. 21 Jul−₹7,075.2110 days left
  5. 25 Jul−₹9,717.666 days left
  6. 31 Jul−₹17,088.750 days left

When it fits and when it does not

Choose the shape for the move you want to understand. A spread can cap both gains and losses. A sold option can leave a large loss. More legs do not make a basket safe.

Common mistakes

Check every leg, its ratio and its expiry. Finishing does not mean you made a profit. Subtract the premium and charges. A capped chart does not cap an unbounded loss.

Charges are shown separately. An option held to expiry is charged differently.

Your strategy

LegContractExpiryLotsEntry premium
SoldNIFTY Future31 Jul 20251₹25,530.35
BoughtNIFTY 25,500 Call31 Jul 20251₹352.90

See every number

Implied Volatility (IV)

Implied volatility is the market's assumption about how much the underlying will move before expiry.

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Option Premium

An option's price is its premium.

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Strike Price

The strike price is the level at which an option can be exercised.

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Expiry Day

Expiry day is the last day on which a derivative contract can be traded.

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Time Value

Time value is the part of an option's premium that is left after intrinsic value is taken out.

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Lot Size

Lot size is the number of units of the underlying that one derivatives contract stands for.

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Moneyness (ITM, ATM, OTM)

Moneyness describes where an option's strike sits relative to the current level of the underlying.

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