How Much Capital Do You Need to Start Option Selling? (Complete Beginner's Guide)

Option selling is gaining popularity among traders who seek consistent income and controlled risk. But if you're just starting out, one of the most common and important questions is: "How much capital do I need to start option selling?" In this post, we’ll break it down for you in a simple, beginner-friendly way.

What is Option Selling? (Quick Recap)

Option selling (also called option writing) is a strategy where you sell options contracts to collect premiums. As the seller, your goal is for the option to expire worthless so you can keep the premium as profit.

Unlike option buying (where risk is limited), option selling can carry higher margin requirements and unlimited risk — hence capital plays a critical role.

Minimum Capital Required to Start Option Selling in India

1. Exchange Lot Size & Margin Requirements

In India, index options like Nifty and Bank Nifty have fixed lot sizes:

• Nifty: 50 units per lot
• Bank Nifty: 15 units per lot

To sell one lot of Nifty option, you need to maintain a SPAN + Exposure Margin, which generally ranges from:

• ₹1.2 lakh to ₹1.8 lakh per lot, depending on volatility

2. Using Hedging to Reduce Capital

You can significantly reduce capital requirement by hedging your position (buying a far OTM option to limit risk).

With a properly hedged position:

• Required capital can drop to ₹40,000 – ₹60,000 per strategy

Ideal Capital Range for Beginners

Brokerage and Platform Charges

Your capital should also cover brokerage, STT, exchange fees, and slippages. Discount brokers like Zerodha, Angel One, or Upstox charge:

• ₹20 per executed order
• Minimal platform charges

So keep a buffer of 5-10% capital aside for operational costs.

Tips Before You Start Option Selling

• Learn the Basics First – Understand terms like strike price, premium, Greeks, etc.
• Practice in Paper Trading – Use tools like Sensibull or Opstra before going live.
• Always Use Stop Losses – Protect capital at all costs.
• Use Hedged Positions – Especially in volatile markets.
• Avoid Over-leveraging – Don’t use full capital in one go.

Conclusion

To start option selling safely in India:

• You can begin with ₹40,000 to ₹75,000 using hedged strategies.
• For naked option selling, be prepared to invest at least ₹1.5 to ₹2 lakhs.
• Start slow, focus on learning, and prioritize capital protection.

Option selling is not a get-rich-quick scheme, but with patience and proper risk management, it can be a consistent income source.

Disclaimer: Trading in derivatives involves risk. This post is for educational purposes only. Always consult with a SEBI-registered advisor before investing.