The National Stock Exchange (NSE) has decided to introduce one Paisa tick size for all stocks below the trading price of Rs 250 per share, according to a circular on NSE dated May 24.
The measure - being introduced on June 10 - is seen as a step towards better price discovery, once which also captures the intense competition between exchanges NSE and BSE for market dominance, according to some market participants.
Tick size is a basic difference in price quotes that exists between two consecutive bids and offer prices.
All securities - except ETFs - under EQ, BE, BZ, BO, RL, and AF series will see their tick sizes change from the earlier tick of five paise, according to the NSE circular. The tick size for securities in T 1 settlement will also be applicable for T 0 settlement (series T0), the circular added.
NSE informed that the tick sizes will be subject to review & adjustments every month, based on the closing price of the last trading day of the month.
The stock futures too shall have the same tick size from July 8, as applicable in the cash market segment, and revisions in tick size will be applicable for all expiries i.e. Near-Month, Middle Month, and Far-Month, NSE said in a circular.
0 Comment