Trending Topics NSE revises lot size of Nifty, four other F&O segments effective November 20

In a circular, the NSE announced adjustments to the lot sizes of various index derivatives. The lot size of Nifty contracts has been increased from 25 to 75, Bank Nifty from 15 to 30, Fin Nifty from 25 to 65, Midcap Nifty from 50 to 120, and Nifty Next 50 from 10 to 25. These changes apply to all new index derivatives contracts—including weekly, monthly, quarterly, and half-yearly contracts—starting November 20, 2024.

The NSE specified that each new index derivative contract will have a minimum value of ₹15 lakh upon introduction. The lot sizes are set to maintain a contract value between ₹15 lakh and ₹20 lakh at the time of review.

Existing weekly and monthly expiry contracts will retain their current lot sizes until expiration. However, ongoing quarterly and half-yearly expiry contracts will transition to the new lot sizes on December 24, 2024, for Bank Nifty, and December 26, 2024, for Nifty.

Earlier, the NSE confirmed it would retain weekly derivative contracts tied to the Nifty 50, despite SEBI’s new restrictions on weekly options contracts starting November 20. These adjustments, ordered by SEBI, aim to mitigate the rapid growth in options trading by retail investors, which SEBI and the government see as potentially risky for household finances. Consequently, NSE will discontinue its weekly options for Bank Nifty, Nifty Financial Services, and Nifty Mid-Cap indices. Similarly, the BSE will end weekly derivative contracts for Bankex and Sensex 50, retaining only those linked to its benchmark BSE Sensex.

A SEBI study indicated that individual traders incurred net losses totaling ₹1.81 lakh crore in futures and options trading from FY2021 to FY2024, with only 7.2% of traders realizing profits.