Nifty Lot Size Revised: The National Stock Exchange (NSE) has reduced the market lot size of Nifty futures from 75 to 50 per lot. This move from NSE will reduce the burden of excessive margin charged from the traders in Nifty futures trading. The reduction in Nifty lot size will reduce traders’ margin by Rs 55000 approximately. The margin requirement of other Nifty key indices like Bank Nifty and Nifty Financial Services has not changed and will remain the same.
Nifty is fairly known as the representative of the stock market as a whole. Nifty futures are essential futures contracts on the NSE Nifty. So far the lot size of Nifty was 75 units and which makes a lot value at a little over Rs 11.80 lakhs. The reduction of the unit from 75 to 50 will reduce the lot value from 11.80 to 7.88 lakh.
At present, a trader needs approximately Rs 174,000 margin to trade one lot Nifty futures for positional trading. From the July series onwards the margin requirement will reduce by one-third i.e around Rs 1,18,000 per lot for positional trading.
Details about Nifty lot size changes as per NSE
All Nifty monthly expiry contracts starting from the July expiry will have a new lot size of 50. The Nifty July contracts started trading from 30 April. The April, May, and June contracts will continue to have a lot size of 75.
All Nifty weekly expiry contracts from August will have the revised lot size of 50.
After the June expiry, the Nifty long-term options contracts ( where the expiry is greater than 3 months) will revise from the current lot size of 75 to 50. The average closing price of Nifty (cash) will be taken to adjust the contract value.
Advantages of Nifty lot-size changes
- The traders will be benefited from the changes and can trade in Nifty futures with lower margins.
- Trading volume can increase as it will attract more traders to start trading in Nifty futures due to lower margins.
- As the new Nifty futures contracts require only two-thirds of the existing margin, one-third of savings can use for MTM purposes and save the exchange penalty.
As a trader, you should take the advantage of margin reduction done by the NSE exchange. You should ask your broker for the new Nifty futures lot size margins and trade accordingly.
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