Which is better for leverage,NIFTY future or out of the money option?

I am trying to understand NIFTY futures and option. Pleas tell me if I am correct

  • A single lot of nifty futures costs around 18000 in margin with a delta of 1
  • A single lot of nifty ATM option costs Around 220*25 = 5500.  Even with a delta of 0.5 wouldn't the option provide higher leverage than future.
  • Under what circumstances should an option or a future be used for a day trader?

Buying options can definitely offer a lot more leverage than trading futures. STT on options is also much lesser than trading futures.

As long as you are long volatility (expect volatility to be high, expect big movements in market either way), I think option buying is better than trading futures. But yeah, if you feel that market will be in a range, futures are much better.