Changes to Nifty50, 40 stocks F&O contract lot size come into effect

The new lot sizes of the Nifty50’s futures & options (F&O) contracts and forty stocks are applicable from the July F&O series. The National Stock Exchange of India (NSE) had decided to reduce the lot size for the Nifty50’s F&O contracts and 40 stocks on March 31.

Accordingly, the F&O lot size of Nifty50 has been slashed to 50 from 75 and that of 40 individual stocks by 50 percent.

The lot size for Nifty Bank at 25 and Nifty Financial Services at 40 has been kept unchanged.

The reduction in the lot size for the Nifty contracts will reduce the margin requirements for futures trading by one-third, giving relief to retail traders.

The move comes at a time when the third phase of Securities and Exchange Board of India’s (Sebi) peak margin regulations has become effective from June 1.

The new rules mandate brokers to collect margins based on the intraday peak position. From June 1, the upfront margin requirement was raised to 75 percent from 50 percent and it will be eventually be raised to 100 percent from September onwards.

These rules were brought to effect last year in a phased manner.

State Bank of India, Tata Motors, Tech Mahindra, Titan Company, UltraTech Cement, Wipro, Tata Power, Adani Enterprises, Ashok Leyland, Bajaj Finance, BHEL, Apollo Hospitals Enterprise, Cipla, Grasim Industries, Hindalco Industries, Jindal Steel & Power, Mahindra & Mahindra, Mindtree and SAIL are the among 40 stocks whose market lot size has been revised

In the case of Bajaj Finserv and Coforge, the market lot size has been reduced to 75 from 125 and to 200 from 375, respectively.

The lot size for F&O contracts of 114 stocks are unchanged.