01 Apr , 2021 By : Kanchan Joshi
The National Stock Exchange (NSE) has announced the revision in market lot of Derivative Contracts on indices. The NSE has reduced the lot size to 50 from the existing market lot of 75 on Nifty 50, the exchange 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 told PTI. ''Currently, traders need approximately Rs1,73,000 to trade one lot. 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," the bourse said.
Contracts with August 2021 Weekly expiry & beyond will have revised market lots. The exchange said that the circular shall come into effect from April 30, 2021.
"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 added.
The lot size for derivative contracts on Nifty Bank and Nifty Financial Services have not been revised and has been kept the same at 25 and 40 respectively, as per the circular.
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