Revision in lot size of Nifty and stock F&O contracts (2024)

FAQs

What is Nifty lot size revised? ›

All weekly expiry contracts from August will have the revised lot size of 15 qty. After the June 2023 expiry, the Bank Nifty long-term options contracts (where the expiry is greater than 3 months) will be revised from the current lot size of 25 Qty to 15 Qty.

As part of its periodic review, NSE will be revising the lot size of Futures and Options contracts on 37 stocks with effect from October 28, 2022. SEBI mandates that the contract value of all F&O contracts remain between 5 to 10 Lakhs.

The market lot size for Nifty Bank futures and options has been reduced to 15 from 25, effective from the beginning of July 2023 contracts. In a circular on Friday, the National Stock Exchange said only the far-month contract, i.e., July 2023 expiry contracts, would be revised for market lots.

The lot size of all existing Nifty Bank long-term options contracts (having expiry greater than 3 months) shall be revised from 25 to 15 after expiry of June 2023 contracts (i.e. June 30, 2023) Stock exchange NSE has reduced Bank Nifty's lot size to 15 from 25 earlier from July 2023 monthly expiry.

NIFTY 50 uses clear, researched and publicly documented rules for index revision. These rules are applied regularly, to obtain changes to the index set. Index reviews are carried out every six months to ensure that each security in the index fulfils all the laid down criteria.

As part of its periodic review, NSE will be revising the lot size of Futures and Options contracts on 33 stocks with effect from April 28, 2023. SEBI mandates that the contract value of all F&O contracts remain between 5 to 10 Lakhs.

SEBI defines lot sizes for all the indices and stocks that are permitted to trade in F&O, the list of which is constantly updated by SEBI.

In terms of options, a lot represents the number of contracts contained in one derivative security. One equity option contract represents 100 underlying shares of a company's stock. In other words, the lot for one options contract is 100 shares.

How many lots of Nifty options can I buy? ›

A standard equity options contract (call or put) is usually based on physical delivery of 100 shares of stock (although sometimes the number of shares of stock an options contract delivers may not be 100). The options prices are quoted in decimals, so every .

In the derivatives market, the lot size of futures and options contracts is determined by the stock exchange from time to time. The lot size of various F&O contracts for a given underlying is always the same.

From September 2020, SEBI has changed the margin requirement for trading in the cash market. For intraday trading also traders now have to deposit 20 percent of the transaction volume with the broker to avail margin facility. You can pledge existing securities in your DEMAT account as collateral.

Trading With Micro Lots

If you are trading a dollar-based pair, one pip would be equal to ten cents. 2 Micro lots are very good for beginners who want to keep risk to a minimum while practicing their trading.

If one has to translate the number of contracts into lots, then an individual will be able to buy/sell not more than 36 lots (the lot size of Nifty futures is 50) in a single order.

Price to Earnings Ratio

It is calculated by dividing the company's share price by its earnings per share. It tells investors whether a particular share is overvalued or not. A high P/E ratio is often not suitable for investors.

The NSE rebalances its indices twice every year, and owing to this rejig, certain stocks will be replaced by others and see an exit.

The Nifty closed at 4,899 at a loss of 310 points. Trading was suspended for one hour at the Bombay Stock Exchange after the benchmark Sensex crashed to a low of 15,576.30 within minutes of opening, crossing the circuit limit of 10 per cent. On 11 Feb 2008, the Sensex fell by a further 834 points to 16,630.

The brokerage's target for the current calendar year implies upside of as much as 16 per cent from its current levels. ICICI Direct expects the headline Nifty index to touch the 21,400 mark in 2023, and rise all the way to as high as 50,000 by 2030.

What is the Nifty Outlook for 2023? ›

The immediate support for Nifty is placed in the range of 18240-18200 followed by short term support in 18050-18000 range. On the higher side, the resistance for the index is seen around the 78.6 percent retracement of the previous downmove which is placed around 18450.

For Nifty, the immediate support is placed around 17570 followed by 17500-17480 range. On the higher side, 17770 will be the resistance to watch above which, the index could head towards the 18000 mark.

When you buy one lot of Nifty in the near month, your margin is around 10% for normal trades and 5% for MIS (intraday) trades. That means you get 10 times leveraged in a normal trade and 20 times leverage in intraday trades.

The National Stock Exchange has reduced the market lot size for Nifty Bank futures and options to 15 from 25. The new rule is applicable from the beginning of July 2023 contracts.

Intraday (MIS) Margin:

For Intraday index futures the initial margin is set at 40% of the normal initial margin while in case of intraday stock futures, the initial margin is set at 50% of the normal initial margin. In the above case, the margin will be 50% of the normal margin which is Rs. 44,669/-.

In conclusion, lot size is an essential consideration in options trading, as it refers to the number of contracts bought or sold in a single trade. The lot size is pre-decided by the exchange, however, it can be modified.

The larger the lot size, the more significant the potential profit or loss. However, higher lot sizes also require more margin and higher leverage, which increases the risk. Therefore, it is crucial to choose the lot size that suits your trading style, risk tolerance, and account size.

Although the amount of leverage does not affect the size of the contract itself, it increases the purchasing power of the account. It allows you to buy more lots and reduce the amount of margin. The size of the contract directly affects the volume of your position, and, therefore, its final value.

This little calculation is based on the Market Wide Position Limit (MWPL) and the aggregate open interest (OI). A stock enters the F&O ban list when its aggregate open interest of a stock exceeds 95% of the MWPL. A stock will remain in the F&O ban list, until the aggregate OI does not fall below 80% of MWPL.

In the case of TATA STEEL, the adjustment factor is (10/1) = 10, since the split ratio is 10:1. What will be the new price & lot size for futures? The adjusted market lot will be arrived at by multiplying the old market lot by the adjustment factor. The revised market lot size would be 4250.

How many stocks are listed in F&O in NSE? ›

Futures contracts are available on 188 securities stipulated by the Securities & Exchange Board of India (SEBI). These securities are traded in the Capital Market segment of the Exchange.

Static lot sizing methods consist of ordering a fixed quantity or the exact amount of requirements for the date needed. 1. Fixed Order Quantity: This method involves ordering a fixed quantity when the reorder point is reached. The quantity often depends on the supplier-specific constraints.

Lot Size When Buying a Home Vs.

If you are buying a land/home package from a contractor, you will likely pay more for the larger lot. More land means more prep work, more landscaping, etc., and all those costs figure into the deal.

It is highly advisable that at a minimum, one should be putting in $5,000-10,000 for starting options trading in order to make any profits. One can use conservative strategies to ensure that they at least make back their initial investment. Options trading is considered to be all about customization.

Yes, you can buy and sell options on the very same day.

The buyer of an option can't lose more than the initial premium paid for the contract, no matter what happens to the underlying security. So the risk to the buyer is never more than the amount paid for the option. The profit potential, on the other hand, is theoretically unlimited.

Limits vary according to the number of outstanding shares and past six-month trading volume of the underlying stock. The largest in capitalization and most frequently traded stocks have an option position limit of 250,000 contracts (with adjustments for splits, re-capitalizations, etc.)

In general, 30-90 days is the “sweet spot” for most options trading strategies. If you're correct and the price of the underlying goes exactly where you expected, you're rewarded with quick profits. If the position doesn't work, you don't have to wait until expiration.

What is the significance of lot size? ›

The aim of lot size is to determine the minimum quantity of a product or asset that can be traded in a single transaction. The lot size impacts the direction in which the market moves and affects the demand and supply in an economy.

"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 said.

That is you cannot buy or sell Nifty Futures more than 1,800 contracts in a single order. If one has to translate the number of contracts into lots, then an individual will be able to buy/sell not more than 36 lots (the lot size of Nifty futures is 50) in a single order.

In terms of allocation to individual stocks, NIFTY Next 50's holding is more evenly distributed as against NIFTY 50 or NIFTY Next 50. NIFTY Next 50's top 10 stocks contribute close to 34% of the index, making it the least concentrated large-cap indices among the three.

The value of the futures contracts on BANKNIFTY may not be less than Rs. 5 lakhs at the time of introduction. The permitted lot size for futures contracts & options contracts shall be the same for a given underlying or such lot size as may be stipulated by the Exchange from time to time.

Using Simple Moving Average as Nifty Trend Finder

If the close of Nifty is above the 5-day SMA the short term trend is UP. Similarly is the close of the Nifty is below the 5-day SMA, the trend of the Nifty is down. This chart will be updated automatically every day after the market hours.

If a stock has a low P/E ratio compared to its peers or the broader market, it may be undervalued. A low P/E ratio could indicate that investors are not valuing the company's future growth prospects or that the stock is oversold. A company's P/B ratio is its stock price divided by its book value per share.

A low P/E ratio could be a sign that a stock is currently undervalued. Price-to-book (P/B) ratio: This is the stock's current share price divided by its equity per share (which is based on the company's assets). A low P/B ratio could indicate an undervalued stock.

What is lot size rule? ›

Lot sizing is to unify the calculated net requirements by a certain unit considering cost reduction and work efficiency. There are two main types of lot sizing: a method to unify in terms of the period and another method to unify in terms of the quantity.