Markets

BSE to increase derivatives lot size

Our Bureau Mumbai | Updated on January 24, 2018

BSE said the market lot for stock derivatives would be in multiples of 25 if the market lot is over 50. File Photo   -  PTI

The Bombay Stock Exchange (BSE) has said that the lot size for derivatives contracts in the equity derivatives segment would be fixed in such a manner that the contract value of the derivative on the day of review (October 30,2015) is within Rs. 5 lakhs and Rs. 10 lakhs.

In a circular on Tuesday, BSE said the market lot for stock derivatives would be in multiples of 25 if the market lot is over 50. However, if the contract value of the stock derivatives at the minimum lot size of 50 is greater than Rs 10 lakhs, then lot size shall be fixed in a multiple of 5, provided the lot size is over 10.

The increase in lot size of equity derivatives follows SEBI’s directive on July 13 to increase the lot size to Rs 5 lakh with effect from October 30, 2015 – after the expiry of October contracts.

Lot size of index derivatives would be over 10 and in multiples of five. Lot sizes would be standardised every six months and would be based on the average of the closing price of the underlying (stock or index) for the last one month. An advance notice of at least two weeks would be given to the market before revision, BSE said.

If the lot size revision is higher than the existing one or lower but not in multiple of the existing one then it will be effective only for new contracts.

For underlying traded across exchanges, review of market lot of equity derivatives contracts has to be carried out by stock exchanges in consultation with each other.

Published on July 21, 2015

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