Important: Revision in lot size in Nifty contracts

NSE (National Stock Exchange of India) has recently issued a circular on revision of lot size in Nifty contracts from 50 to 25. This is applicable for both Nifty Futures and Nifty Options contracts. With this change, 1 lot of Nifty will become of 25 quantity effective from October 31, 2014. The following are key impact of the changes.

a) The total contract value of Nifty Futures contract ( Lot Size * Nifty Value ) will become half. It is elaborated with example below:

Particulars Lot size Nifty Value* Contract Value
Current 50 8000 400000
New (w.e.f. October 31, 2014) 25 8000 200000

 

b) In Futures segment, the margins required to take position in 1 lot of Nifty futures contract will become half since the lot size is reduced. Therefore with same margins you can take 2 lot of Nifty Future contracts.

Particulars Lot size Nifty Value* Contract Value Initial Margin* % Initial Margin Value (Rs.)
Current 50 8000 400000 10% 40000
New (w.e.f. October 31, 2014) 25 8000 200000 10% 20000

c) In Options segment, the Premium / Margin requirement for buying or selling 1 lot of Nifty Option will become half of current premium / margin requirements. So you can take 2 lots of Nifty Options with same funds.

Particulars Lot size Premium* (Rs.) Premium Amount* (Rs.)
Current 50 100 5000
New (w.e.f. October 31, 2014) 25 100 2500

* Values are assumed for calculationd)

With one point movement of price in respective contracts, Profit/Loss will be Rs 25 for both Futures & Options as contract sizes are revised.

The brokerage charged to you will continue to remain as it is on per lot basis in options.

Nifty Futures and Options are the most liquid and most traded contracts on NSE, giving better bid-ask spreads. Further it is well diversified and requires lower margins in comparison to stocks.

The changes are w.e.f. from October 31, 2014 from the start of the new series.

For any clarification, please write to us at customer.care@achiieversequitiesltd.com

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