It is very doubtful that the guitar is too big for you. How you're holding it, where you put your thumb, etc. will matter a lot though. You should use a strap and be standing. How high you adjust the strap is personal preference. The important thing is that it's comfortable. Your thumb should be on the back of the neck on the opposite side of your fingers. Your fingers should be arched so that they push down the strings without touching nearby strings unless you're playing a barre chord. Arching your fingers is the hardest to master.

If you do it right, it's going to hurt like hell until your fingers get calloused enough.