Long-term option of dec 2028

F&O
1

I have a 3 lots of Nifty OTM Dec 22000 PE Sell options for 2028, which are not liquid. If SEBI increases the Nifty lot size from 25 to a larger size, what impact will it have? How was it handled when the Nifty lot size was previously reduced from 75 to 25? Will the lot size be adjusted automatically by the system, or does the user need to take any action? Please clarify. Thanks in advance

2

@Vyshak_Kt Hi, the existing contract will be adjusted in proportion to the new lot size without affecting the contract’s value. Typically, lot size reductions are done in whole ratios to facilitate easy rollovers. Your positions will be recalculated to reflect the new lot size accordingly.

The exchange will announce an effective date, and from that day, your positions will be revised to the new lot size.

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@nithin_kumrr . Thanks you so much for quick response.

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If there is a mismatch, the user has to adjust by adding or decreasing in multiples of the lot within a stipulated time(roughly three months).

In this case you have 3 lots which is 75. Suppose if they increased the lot size to hundred, we have to close the 75 or have to buy 25(to make it 100).

Else, if the new lot size is 50, we can decrease 25(to make it 50) or increase 25(to make it 100).

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@oneda Thank you. Now im clear.

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If the new lot size will be 60 then , what will happen ? you cant make it 60 from 25 .

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@Shivamurugan_S Whenever adjustments happen, the exchange provides details and releases a circular, which we’ll need to refer to at that time.

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In this context, we have to take LCM of 60 and 25 which is 300. So we have to make the existing positions to be 300 or close the existing and open fresh positions as per present lot size.

There will be enough time like atleast an expiry time to make these changes or else the broker will close the positions at the end of stipulated time…

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