NSE reduces market lot size for Nifty 50 derivative contracts

By: |
April 1, 2021 11:20 AM

The National Stock Exchange (NSE) has slashed the market lot size for derivative contracts on Nifty 50, a move that will reduce the burden of excessive upfront margins for retail traders.

NSE"The lot size of all existing NIFTY long term options contracts (having expiry greater than 3 months shall be revised from 75 to 50 after expiry of June 2021 contracts (i.e. June 25, 2021)," the exchange said.

The National Stock Exchange (NSE) has slashed the market lot size for derivative contracts on Nifty 50, a move that will reduce the burden of excessive upfront margins for retail traders. The lot size has been reduced to 50 from the existing 75, NSE said in a circular on Wednesday.

The reduction in the lot size for NIFTY will reduce the margin requirements for futures trading by one-third, stockbroking firm FYERS CEO Tejas Khoday said. Currently, traders need approximately Rs 1,73,000 to trade one lot, he said.

From July onwards, the margin requirement will reduce to approximately Rs 1,16,000 (at current Nifty prices). This is a great move by NSE to reduce the burden of excessive upfront margins for retail traders, he added.

“Only the far month contract i.e. July 2021 expiry contracts will be revised for market lots. Contracts with maturity of May 2021 and June 2021 would continue to have the existing market lots. All subsequent contracts (i.e. July 2021 monthly expiry and beyond) will have revised market lots,” NSE said.

According to the bourse, the day spread order book will not be available for the combination contract of May-July 2021 and June-July 2021 expiries. Contracts with August 2021 weekly expiry and beyond will have revised market lots.

“The lot size of all existing NIFTY long term options contracts (having expiry greater than 3 months shall be revised from 75 to 50 after expiry of June 2021 contracts (i.e. June 25, 2021),” the exchange said.

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