Derivatives

What is quantity freeze limit

Gurumurthy K BL Research Bureau | Updated on November 06, 2021

Many risk management measures are there in the Indian exchanges to ensure smooth trading in the platforms. One such risk control that is available on the National Stock Exchange (NSE) on the Futures and Options segment is the “Quantity Freeze Limit”. It is the maximum number (quantity) of contracts that a market participant can buy or sell in a single order. For instance, the order freeze quantity for the Nifty Futures contract is 1,800. That is you cannot buy or sell Nifty Futures more than 1,800 contracts in a single order. If one has to translate the number of contracts into lots, then an individual will be able to buy/sell not more than 36 lots (the lot size of Nifty futures is 50) in a single order. In case if you place an order to buy/sell say 2,000 contracts (40 lots) then your order will be frozen and automatically rejected by the system.

The quantity freeze limit varies for different indices. It is fixed based on the index values. An index in the range of 27,501 to 40,000 will have a freeze limit of 1,200 contracts. For example, Bank Nifty, currently trading at 39,490 falls in the above-mentioned range. So, the quantity freeze limit is 1,200 contracts. The lot size of Bank Nifty is 25 and so one can buy/sell a maximum of 48 lots in Bank Nifty in a single order. Once the Bank Nifty crosses above 40,000 it will then fall into the next range of 40,001 to 55,000 for which the quantity freeze limit is 600 contracts.

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Published on November 06, 2021

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