Position Sizing – Part 1 | Understanding the Foundations | The Long & The Short Ep.19

Welcome to The Long & The Short – a show where you can expect an honest take on trading, something you won’t hear elsewhere. I’m your host, Sandeep Rao (SEBI Registered Research Analyst – INH000013059). In this episode, we begin a brand-new series on what many professionals consider the single most important pillar of trading: Position Sizing. You can survive with an imperfect strategy. You cannot survive with a broken position sizing framework. Most traders obsess over entries, indicators, and setups. Very few spend enough time on how much capital to deploy, how much risk to take, and how to stay alive during drawdowns. In reality, performance does not end at backtests. That is where the real work begins. 📌 Chapters: 00:00 Intro: Why Position Sizing Matters 01:06 What Is Position Sizing? 03:20 Risk of Ruin Explained 04:53 Lot Size & Notional Value Explained 06:24 Margin: SPAN, Exposure & How It Works 08:48 Leverage in Futures & Its Impact 11:16 Futures vs Options: Key Differences 14:14 Cash Rules, Pledging & Capital Efficiency 17:53 NIFTY Backtest Question 18:29 Conclusion & What’s Next (Part 2) 🔗 Resources & Links: 1. Episode 07 – Financial Products in India: A Trader’s Toolkit | The Long & The Short Ep. 7    • Financial Products in India: A Trader’s To...   2. Episode 11 – Trend Following in India — Part 3: Nifty + Gold Strategy | The Long & The Short Ep. 11    • Trend Following in India — Part 3: Nifty +...   If you prefer reading, we've written a post about this episode here: https://inthemoneybyzerodha.substack.... Do check out our newsletter "Aftermarket Report" where we do a quick daily wrap-up of what happened in the markets, both in India and globally. here: https://aftermarketreport.substack.com/ Check out Varsity Live, a hands-on way to learn finance with experts. Instead of only listening, you practice in real time through activities like personal finance planning, technical charting, balance sheet analysis, and more: https://varsitylive.zerodha.com/home Disclaimer: Investments in securities are subject to market risks. Please read all related documents carefully before investing. SEBI registration does not guarantee the performance of the intermediary or assure returns to investors. The securities mentioned are for illustrative purposes only and do not constitute a recommendation. By proceeding, you acknowledge and agree that any returns shown on this platform are solely for informational purposes. They are not intended to serve as advertisements or promotional material, nor should they influence your investment decisions. Trading and investment decisions should be made at your own discretion, and it is strongly advised to consult a qualified financial advisor before acting on any information provided. Note: Some image(s) may have been created using Al, no copyright infringement is intended. About Zerodha At Zerodha, we simplify complex financial topics to empower you with the knowledge to make smarter investment choices. Whether you're just getting started or looking to sharpen your skills, we’re here to help you navigate the financial world with clarity.