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April 19, 2021
NIFTY50 Lot size reduced to 50!
In its recent circular, the National Stock Exchange (NSE) has announced a revision in the market lot size of Derivative Contracts. As per this, the Market Lot size for NIFTY50 (Symbol - NIFTY) has been reduced from 75 to 50.
However, there is no change in the lot size for derivative contracts on Nifty Bank (Symbol - BANKNIFTY) and Nifty Financial Services (Symbol - FINNIFTY). Their lot sizes remain as 25 and 40 respectively.
How will this help you?
The reduction in the lot size for NIFTY50 will make futures trading more affordable since it reduces the margin requirement substantially. Consider the Example below for a better understanding:
Example
| Existing | Revised | |
| Market Lot Size | 75 | 50 |
| Assumed NIFTY50 Level | 14,500 | 14,500 |
| Lot Value (Rs) | 10,87,500 | 7,25,000 |
| 15% - Margin Required (Rs) | 1,63,125 | 1,08,750 |
- This revision is applicable for Monthly Contracts from July-21 onwards and Weekly Contracts from August-21 onwards.
- Contracts with monthly maturity of May-21 and June-21 will continue to have the existing market lot size of 75.
- Weekly Contracts for the Month of May-21, June-21, July-21 will have the existing market lot size of 75.
- Spread Trading will not be allowed for the combination contract of May 2021 - July 2021 and June 2021 - July 2021 expiries. (Spread trades refer to buying one security and selling another related security as a unit. This is a common activity for regular rollover trades in options and futures contracts. More on Spread Trading)
