NSE Increases Lot Sizes For Derivatives Contracts Amid Sebi's New Guidelines - Details

The National Stock Exchange (NSE) has increased the lot size for all five of its index derivative contracts following an order from the Securities and Exchange Board of India (Sebi) to ensure a minimum contract value of Rs 15 lakh. The changes will apply to new index derivatives contracts—weekly, monthly, quarterly, and half-yearly—starting from November 20, 2024.As per the NSE's circular, the lot size for Nifty50 will jump from 25 to 75 contracts, a threefold increase, while the Nifty Bank lot size will double from 15 to 30.

Nifty Financial Services, commonly known as Fin Nifty, will see its lot size rise from 25 to 65. Nifty Midcap Select's lot size will increase from 50 to 120, and Nifty Next 50 will see an increase from 10 to 25."The existing weekly and monthly expiry contracts will continue with the existing lot size till its respective expiry date. In case of quarterly and half yearly existing expiry contracts, the same shall be transitioned to the new lot size on December 24, 2024, end of the day for Bank Nifty and December 26, 2024, end of the day for Nifty," NSE said in the circular.This adjustment is expected to impact market liquidity and align with Sebi's guidelines for derivatives trading.Earlier this month, the Sebi proposed a 6-step framework to address the issue of consumers losing money in the high risk, high return game of Future & Options

"Given the inherent leverage and higher risk in derivatives, this recalibration in minimum contract size, in tune with the growth of the market, would ensure that an inbuilt suitability and appropriateness criteria for participants is maintained as intended," Sebi had said.