The National Stock Exchange (NSE) is increasing the lot sizes for all five of its index derivative contracts following a directive from the market regulator, SEBI. This change aims to ensure that the minimum lot size is set at at least ₹15 lakh.
Starting November 20, 2024, the new lot sizes will apply to all new index derivatives contracts, including weekly, monthly, quarterly, and half-yearly options.
Here’s how the lot sizes are changing:
- Nifty50: The lot size will increase from 25 to 75 contracts, tripling its size.
- Nifty Bank: The lot size will double from 15 to 30 contracts.
- Nifty Financial Services (Fin Nifty): The lot size will rise from 25 to 65 contracts.
- Nifty Midcap Select: The lot size will grow from 50 to 120 contracts.
- Nifty Next 50: The lot size will increase from 10 to 25 contracts.
Current weekly and monthly contracts will maintain their existing lot sizes until their expiry dates. For existing quarterly and half-yearly contracts, the transition to the new lot sizes will occur on December 24, 2024, for Bank Nifty, and December 26, 2024, for Nifty.
Earlier this month, SEBI introduced a new six-step plan to protect households from losing money in the high-risk environment of futures and options (F&O) trading. Under this framework, the minimum contract size for index futures and options will rise from ₹5-10 lakh to ₹15 lakh.
Additionally, the lot sizes will be determined to ensure that the contract value of derivatives remains between ₹15 lakh and ₹20 lakh at the time of review.
SEBI stated that this increase in the minimum contract size aligns with market growth and aims to maintain suitability and appropriateness for participants in the derivatives market, given the higher risks involved.
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