Bank Nifty F&O Contracts: Change in lot size to 15 from July 2023 expiry

Trading Announcements
1

The lot size of Bank Nifty F&O contracts will be revised to 15 from 25 per lot from July 2023 expiry in the following manner:

  • Only the far-month contract i.e. July 2023 expiry contract will be revised for market lots. Contracts with the maturity of April 2023, May 2023, and June 2023 will continue to have the existing market lots. All contracts from July 2023 monthly expiry and beyond will have a market lot of 15.

  • All weekly expiry contracts from August 2023 expiry will have a market lot of 15.

  • For Bank Nifty long-term options contracts (having expiry greater than 3 months), the lot size will be revised to 15 after the expiry of June 2023 contracts.

Lot size of all the Index derivatives

Underlying Index Symbol Present Market Lot Revised Market lot
Nifty 50 NIFTY 50 50
Nifty Bank BANK NIFTY 25 15
Nifty Financial Services FINNIFTY 40 40
Nifty Midcap Select MIDCPNIFTY 75 75

You can check the announcement from the exchange here:

Why do exchanges revise the lot size?

SEBI mandates that the contract value of all F&O contracts remain between 5 to 10 Lakhs. In the periodic review (every 6 months), if the contract value of the scrip is beyond this range, there is an upward or downward revision in lot size.

2 Likes
2

Does this bring more liquidity?

3

Its already liquid, i don’t see much impact might be some small participant may increase some bit

1 Like
4

How about the margin required and max single order qty? Is it 540?

1 Like
5

liquidity may not increase per se, but the option prices will have lot of air in it. and plenty of arbitrageurs will benefit.

6

I think max quantity will remain 900 unless otherwise specified.

@ShubhS9 ??

1 Like
7

Yes 900 for now

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8

I know it is liquid, I was asking if this can bring more liquidity as the lot size is decreased, so that new traders may come, someone like me :grin:

9

How can decrease in lot size will effect option pricing?

10

its because sellers can ask for higher premiums than X/25*15 due to change in status quo. Atleast to start with.

1 Like
11

Since the lot size is being reduced, the margin requirement too will be less. For now the max quantity allowed per order is 900.

12

Yes, the quantity freeze limit currently is 900.

13

Can changes in the lot size of an option contract affect the price of the option, and if so, how?

14

whats the point if open interest limit for brokers is 15%? this week allowed strikes are so narrow, cant even deploy iron condor on bank nifty. zerodha is largest broker in india, 15% limit is so small. this will only force traders to move to other brokers.

15

technically no

but supply/demand will be different which will create auction pressure

also most algos will be stuck like a deer in headlights due no backtest data for 15qty

16

Algos will take the help of AI and will be back soon :grin:

17

When such a lot size revision takes place, what happens if the position holders do not close out positions such that the new quantity is a multiple of the revised lot size?