Mumbai: The National Stock Exchange (NSE) has announced that it will revise market lot sizes for four major index futures and options contracts, including Nifty 50, effective from October 28.
The lot size for the Nifty 50 index has been reduced from 75 to 65, and the Nifty Bank lot size has been cut from 35 to 30, according to an official statement. The Nifty Financial Services lot size is now 60, down from 65, while the Nifty Mid Select index has been reduced from 140 to 120. The market lot of derivative contracts for the Nifty Next 50 Index was kept unchanged.
Investors can continue to trade with current lot sizes until the December 30, 2025 expiry, after which all new contracts of any maturity will follow the revised, smaller lot sizes. "Members are advised to inform their clients who have positions or take any new positions in the quarterly and half-yearly contracts of the upcoming revision in lot size on the below-mentioned dates," NSE said.
The current lot size for Nifty's weekly and monthly contracts will expire on December 23, while the monthly Nifty and Bank Nifty contracts will expire on December 30. All new contracts after these dates will adhere to the revised sizes. The NSE revises lot sizes of futures & options contracts primarily to keep the contract value within a standard range and to keep the contracts affordable and standardised.
Traders do not have to pay the full value of the contract upfront, as derivatives are leveraged instruments, but their lot size determines the participants' exposure and the margin required. Lot size revisions are undertaken by stock exchanges to enhance market efficiency and liquidity, as well as to ensure that contracts are more appealing to a broader range of market participants.
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