NSE halves Nifty lot size to dwarf listed rival BSE

Facing steadily creeping competition from rival BSE, the National Stock Exchange (NSE), India’s market-leading stock exchange, has halved the lot size of its Nifty futures and options contracts to 25 shares with effect from 26 April across weekly, monthly, quarterly and half-yearly expiries.

The move has made its contracts significantly cheaper than the Sensex options contracts, which picked up steam from May last year. In a circular on Tuesday, NSE said that for the purpose of the computation of contract value, the average closing price of the underlying index has been taken for a one-month period of March 2024.

The average closing price of Nifty in March was 22,187.31 and that of Sensex was 73,180.67. At a lot size of 50, the Nifty contract value works out to ₹11.09 lakh. At a lot size of 25, it is ₹5.5 lakh. At the Sensex average closing price, the contract value (10 shares) is ₹7.3 lakh.

“The change has been effected as competition from rival BSE is increasing gradually," said Chandan Taparia, SVP (head – technical & derivatives research) at Motilal Oswal Financial Services. “The decreased lot size of Nifty could attract more retail participation."