F&O trades set to pinch on hike in index, stock lot sizes

Our Bureau Chennai | Updated on January 23, 2018


Revised market lots will be applicable for Nov expiry contracts: NSE

Derivative trading just became expensive.

After SEBI increased the minimum contract size for equity derivative products to ₹5 lakh from ₹2 lakh, the National Stock Exchange has hiked the lot size of eight indices and 151 stocks.

If you want to, say, buy/sell in Unitech in the derivative segment, you will have to reckon with a lot size of 67,350 units, up from 11,000 now.

The lot size of Nifty has been increased to 75 from current 25, even as the premier bourse has revised the market lot downwards for four firms.

Pay more

The NSE said the revised market lots would be applicable for November expiry contracts and come into effect from August 28.

Nithin Kamath, Founder & CEO of Zerodha, said: “The effect on liquidity of Nifty futures & option contracts will probably be minimal, but we expect a big dip in volume on the stock futures contract where retail participation is much higher and the increased contract value will mean higher margins to take positions to trade and/or hedge.”

While the lot size on CNX PSE index and Nifty Midcap50 has been doubled to 150, the most active Bank Nifty's lot size will be hiked to 30 from 25.

The lot size of CNX IT has been revised to 45 from 25, CNX Infra 150 (100), Dow Jones Industrial Average 30 (25) and FTSE 100 75 (50).

Ramesh Chordia, an independent analyst in Chennai, said traders may now concentrate their trading on Nifty and Bank Nifty contracts. He added that a few may even dabble in the cash segment for day trading.

Among the most active counters in the derivative segment that saw increase in market lot size include Ashok Leyland, Axis Bank, Bank of Baroda, BPCL, Cairn India, Canara Bank, Coal India and DLF.

Published on August 10, 2015

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