NIFTY 50₹22,500▲125.30(0.56%)•
SENSEX₹74,200▲412.50(0.56%)•
BANK NIFTY₹48,300▼210.40(0.43%)•
TATA MOTORS₹780.00▲12.45(1.62%)•
INFOSYS₹1,520.00▼18.20(1.18%)•
WIPRO₹475.00▲5.60(1.19%)•
RELIANCE₹2,890.00▲34.50(1.21%)•
TCS₹3,650.00▼28.10(0.76%)•
HDFC BANK₹1,580.00▲15.20(0.97%)•
ICICI BANK₹1,120.00▲8.90(0.80%)•
SBI₹820.00▼5.30(0.64%)•
BHARTI AIRTEL₹1,650.00▲22.80(1.40%)•
HUL₹2,380.00▼12.40(0.52%)•
ITC₹445.00▲3.20(0.72%)•
KOTAK BANK₹1,780.00▲14.60(0.83%)•
LT₹3,420.00▼45.20(1.30%)•
AXIS BANK₹1,080.00▲9.50(0.89%)•
BAJAJ FINANCE₹7,200.00▲85.40(1.20%)•
MARUTI₹12,400▼150.00(1.19%)•
ASIAN PAINTS₹2,850.00▲18.90(0.67%)•
HCLTECH₹1,420.00▼16.30(1.14%)•
TITAN₹3,250.00▲42.60(1.33%)•
ADANI PORTS₹1,380.00▼22.40(1.60%)•
POWER GRID₹310.00▲4.80(1.57%)•
NTPC₹365.00▲6.20(1.73%)•
SUNPHARMA₹1,680.00▼8.50(0.50%)•
NIFTY 50₹22,500▲125.30(0.56%)•
SENSEX₹74,200▲412.50(0.56%)•
BANK NIFTY₹48,300▼210.40(0.43%)•
TATA MOTORS₹780.00▲12.45(1.62%)•
INFOSYS₹1,520.00▼18.20(1.18%)•
WIPRO₹475.00▲5.60(1.19%)•
RELIANCE₹2,890.00▲34.50(1.21%)•
TCS₹3,650.00▼28.10(0.76%)•
HDFC BANK₹1,580.00▲15.20(0.97%)•
ICICI BANK₹1,120.00▲8.90(0.80%)•
SBI₹820.00▼5.30(0.64%)•
BHARTI AIRTEL₹1,650.00▲22.80(1.40%)•
HUL₹2,380.00▼12.40(0.52%)•
ITC₹445.00▲3.20(0.72%)•
KOTAK BANK₹1,780.00▲14.60(0.83%)•
LT₹3,420.00▼45.20(1.30%)•
AXIS BANK₹1,080.00▲9.50(0.89%)•
BAJAJ FINANCE₹7,200.00▲85.40(1.20%)•
MARUTI₹12,400▼150.00(1.19%)•
ASIAN PAINTS₹2,850.00▲18.90(0.67%)•
HCLTECH₹1,420.00▼16.30(1.14%)•
TITAN₹3,250.00▲42.60(1.33%)•
ADANI PORTS₹1,380.00▼22.40(1.60%)•
POWER GRID₹310.00▲4.80(1.57%)•
NTPC₹365.00▲6.20(1.73%)•
SUNPHARMA₹1,680.00▼8.50(0.50%)•
NIFTY 50₹22,500▲125.30(0.56%)•
SENSEX₹74,200▲412.50(0.56%)•
BANK NIFTY₹48,300▼210.40(0.43%)•
TATA MOTORS₹780.00▲12.45(1.62%)•
INFOSYS₹1,520.00▼18.20(1.18%)•
WIPRO₹475.00▲5.60(1.19%)•
RELIANCE₹2,890.00▲34.50(1.21%)•
TCS₹3,650.00▼28.10(0.76%)•
HDFC BANK₹1,580.00▲15.20(0.97%)•
ICICI BANK₹1,120.00▲8.90(0.80%)•
SBI₹820.00▼5.30(0.64%)•
BHARTI AIRTEL₹1,650.00▲22.80(1.40%)•
HUL₹2,380.00▼12.40(0.52%)•
ITC₹445.00▲3.20(0.72%)•
KOTAK BANK₹1,780.00▲14.60(0.83%)•
LT₹3,420.00▼45.20(1.30%)•
AXIS BANK₹1,080.00▲9.50(0.89%)•
BAJAJ FINANCE₹7,200.00▲85.40(1.20%)•
MARUTI₹12,400▼150.00(1.19%)•
ASIAN PAINTS₹2,850.00▲18.90(0.67%)•
HCLTECH₹1,420.00▼16.30(1.14%)•
TITAN₹3,250.00▲42.60(1.33%)•
ADANI PORTS₹1,380.00▼22.40(1.60%)•
POWER GRID₹310.00▲4.80(1.57%)•
NTPC₹365.00▲6.20(1.73%)•
SUNPHARMA₹1,680.00▼8.50(0.50%)•
NIFTY 50₹22,500▲125.30(0.56%)•
SENSEX₹74,200▲412.50(0.56%)•
BANK NIFTY₹48,300▼210.40(0.43%)•
TATA MOTORS₹780.00▲12.45(1.62%)•
INFOSYS₹1,520.00▼18.20(1.18%)•
WIPRO₹475.00▲5.60(1.19%)•
RELIANCE₹2,890.00▲34.50(1.21%)•
TCS₹3,650.00▼28.10(0.76%)•
HDFC BANK₹1,580.00▲15.20(0.97%)•
ICICI BANK₹1,120.00▲8.90(0.80%)•
SBI₹820.00▼5.30(0.64%)•
BHARTI AIRTEL₹1,650.00▲22.80(1.40%)•
HUL₹2,380.00▼12.40(0.52%)•
ITC₹445.00▲3.20(0.72%)•
KOTAK BANK₹1,780.00▲14.60(0.83%)•
LT₹3,420.00▼45.20(1.30%)•
AXIS BANK₹1,080.00▲9.50(0.89%)•
BAJAJ FINANCE₹7,200.00▲85.40(1.20%)•
MARUTI₹12,400▼150.00(1.19%)•
ASIAN PAINTS₹2,850.00▲18.90(0.67%)•
HCLTECH₹1,420.00▼16.30(1.14%)•
TITAN₹3,250.00▲42.60(1.33%)•
ADANI PORTS₹1,380.00▼22.40(1.60%)•
POWER GRID₹310.00▲4.80(1.57%)•
NTPC₹365.00▲6.20(1.73%)•
SUNPHARMA₹1,680.00▼8.50(0.50%)•
NISM VIII — Equity Derivatives ~5 min read

Futures Payoffs — Long and Short

A futures payoff is linear and symmetric. Long futures profits ₹1 for every ₹1 the underlying rises above the entry price, and loses ₹1 for every ₹1 it falls. S...

Definition

Linear Payoff

A futures payoff is linear and symmetric. Long futures profits ₹1 for every ₹1 the underlying rises above the entry price, and loses ₹1 for every ₹1 it falls. Short futures is the mirror image. Both profit and loss are unlimited — there is no built-in floor or ceiling.

In Simple Words
💡

The payoff line of a long futures is a 45° line passing through the entry price — above that point it's profit, below it's loss. Short futures reflects the line to produce the opposite P&L. Because both sides have unlimited P&L, futures are "zero-sum" — every rupee the long makes, the short loses. The payoff per contract = (Exit Price − Entry Price) × Lot Size for long; reverse for short.

📏
45° Line

Every ₹1 move = ₹1 P&L per share — perfectly linear

🪞
Mirror Payoff

Long and short are exact mirror images

🎢
Unlimited Both Ways

No cap on profit, no floor on loss

⚖️
Zero-Sum Game

One side's gain = other side's loss, rupee-for-rupee

Real-Life Scenario

A Practical Example

📐
Payoff at Expiry
Long futures entered at 100 — rupee P&L per unit
Underlying at ExpiryLong Futures P&LShort Futures P&L
50−50+50
75−25+25
100 (breakeven)00
125+25−25
150+50−50
Key Points to Remember

What Makes This Important

💰
Long futures P&L = (Settlement − Entry) × Lot Size
🤖
Short futures P&L = (Entry − Settlement) × Lot Size
🪙
Payoff is linear — 45° line
⚖️
Both long and short have unlimited profit and unlimited loss
🎯
Zero-sum — gains on one side = losses on the other
🧠
Daily MTM means P&L accrues in the margin account every day
The Formula

Futures Payoff Formula

Futures Payoff Formula
Long P&L = (ST − F0) × Q
Short P&L = (F0 − ST) × Q
F0 — Futures entry price
ST — Settlement / exit price
Q — Lot size (quantity)
FAQs

Frequently Asked Questions

No. Unlike forwards, futures P&L is marked-to-market every day and flows through the margin account. On expiry, only any residual P&L since the previous day's close is settled.

Test Your Knowledge

🧠 Quick Quiz

2 questions to check your understanding

2
Questions
Question 1 of 2

If you are long 1 Nifty futures lot (25 units) entered at 22,000 and expiry is at 22,300, your P&L is _____.

Summary Notes

Key Takeaways

Linear, symmetric, zero-sum payoff
P&L = (direction × Δprice × lot size)
Unlimited both ways — unlike options
Futures Payoffs — Long and Short — NISM VIII — Equity Derivatives