Lot sizes have changed in index derivatives. The National Stock Exchange (NSE) has revised the lot size for index derivatives to enhance investor protection and market stability. The revised lot size will be effective for all new index derivative contracts (including weekly, monthly, three-month and semi-annual) from November 20, 2024.
The following amendments have been made after the SEBI circular dated October 01, 2024. It aims to strengthen the equity index derivatives system, according to which the price of an index derivative contract should not be less than Rs 15 lakh at the time of market launch.
According to the SEBI circular, the lot size will be determined in such a way that the contract price of the derivative on the day of review is between Rs 15 lakh and Rs 20 lakh.
NSE said in its circular that the existing weekly and monthly expiry contracts will continue with existing lot sizes till their respective expiry dates. In case of quarterly and semi-annual current expiry contracts, they will be converted to new lot sizes at the end of day on December 24, 2024 for Bank Nifty and December 26, 2024 for Nifty.
The lot size of Nifty 50 is currently 25 which will be 75. Similarly, the lot size of Bank Nifty which is 15, will be 30. Midcap lot size will increase from 50 to 120.
This decision to change the lot size will have a direct impact on futures and options traders. This will be effective on all new index derivative contracts starting from November 20, 2024, NSE said in a circular.
The Nifty50 lot size has been increased from 25 contracts to 75, a 3-fold increase. The lot size of Nifty Bank has doubled to 30 from the current 15.
Nifty Financial Services, also known as Fin Nifty, will increase its lot size from 25 to 65. The lot size of Nifty Midcap Select has increased from 50 to 120. The lot size of Nifty Next 50 will increase from 10 to 25.
Earlier this month, SEBI announced a framework to tackle the problem of households losing money in the high risk-high reward game of F&O.
Note: Do not invest in stock market without knowledge. Before investing in any shares you should talk to your financial advisor once. If you do not do so, you may suffer financial loss.
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