⚠ BETA — all market data shown (deals, filings, prices, indices) is demo / illustrative, not live trading data. For evaluation only; verify before acting.
June 14, 2026
The Dispatch

Definition

Notional Value

Notional value is the full market value an F&O contract controls — the lot size times the underlying price.

If a Nifty future has a lot size of 25 and Nifty is at 24,000, the notional value is 25 x 24,000 = ₹6,00,000, even though the margin required is only a fraction of that. Notional value is what your position actually controls, and it is the true measure of your exposure.

Understanding notional value is essential for Indian F&O traders because leverage lets a small margin control a large notional — magnifying both gains and losses. SEBI periodically resets lot sizes to keep contract notional values within a target band, which is why lot sizes change over time.

Related terms

  • Exposure MarginExposure margin is an additional buffer collected on top of SPAN margin to cover extreme or unexpected market moves.
  • MarginMargin is the upfront money a trader must keep with the broker as collateral to take a leveraged futures or options position, set by the exchange to cover potential losses.
  • LeverageLeverage is using borrowed money or margin to control a position larger than your own capital alone would allow.
  • Lot SizeLot size is the fixed minimum quantity in which a futures or options contract trades — you cannot trade a single unit in F&O.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.