The size of Nifty contracts is being revised from 75 to 50 per lot in the following manner:
All monthly expiry contracts starting from the July expiry contract will have a lot size of 50. The Nifty July contract starts trading from 30th April. The April, May, and June contracts will continue to have a lot size of 75.
All 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 be revised from the current lot size of 75 to 50. The average closing price of Nifty (cash) will be taken to adjust the contract value.
Alternatively, the exchange may do an M2M settlement for the 25 units being reduced from the lot size. The additional 25 units will be settled in the June month expiry in the M2M settlement normally and will not roll over to the next day.
For example, you hold 1 lot Nifty Sep long CE option at 11900 strike. Nifty opens at 11900 on the last Thursday of June and closes at 12000. You get 25 x 100 = Rs. 2500 M2M settlement EOD. Next day your lot size becomes 50 and settlement happens normally on contract expiry.
The exchange may either do this ^ or change the strike price to price in the lot size change (in case of OTM options).
[We’ll update this post once we get the confirmation from the exchange.]
The lot size of all existing NIFTY long term options contracts (having expiry greater than 3 months) shall be revised from 75 to 50 after the expiry of June 2021 contracts (i.e. June 24, 2021). If you hold a position in a Nifty options contract, you will not be able to completely exit it unless you change your position to multiples of 50. Learn more.
Read this circular from NSE for more details.