The National Stock Exchange of India (NSE) on March 31 decided to reduce the lot size for the Nifty50’s futures & options (F&O) contracts to 50 from 75. It has also slashed the F&O lot size of 40 stocks by 50 percent.

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The lot size for Nifty Bank at 25 and Nifty Financial Services at 40 has been kept unchanged.

NSE said only the far month contract, i.e., July 2021 expiry contracts will be revised for market lots.

“Only the far month contract, i.e., July 2021 expiry contracts will be revised for market lots. Contracts with the maturity of May 2021 and June 2021 would continue to have the existing market lots. All subsequent contracts (i.e. July 2021 expiry and beyond) will have revised market lots,” NSE said in a circular issued on March 31.

Contracts with August 2021 weekly expiry and beyond will have revised market lots.

The day spread order book will not be available for the combination contract of June 2021 - July 2021 expiry for stocks and May 2021 - July 2021 and June 2021 - July 2021 expiries in case of Nifty50, the exchange added.

The lot size of all existing Nifty long-term options contracts having an expiry greater than three months shall be revised from 75 to 50 after the expiry of June 2021 contracts (i.e. June 25, 2021).

For the purpose of the computation, the exchange has taken the average of the closing price of underlying for one month period of March 1 to March 31, 2021.

The changes shall come into effect from April 30, 2021.

Here is the list of 40 stocks whose lot size has been reduced:

Additionally, in order to encourage active participation in Quarterly Options contracts on Nifty Bank Index, it has been decided that no transaction charges will be levied on the trades done in Quarterly Options contracts on the Nifty Bank Index in the Future & Options segment of the Exchange from April 1, 2021, till September 30, 2021, NSE said in a separate circular.

The Exchange has announced the introduction of trading in Quarterly Options contracts on the Nifty Bank Index in the Future & Options segment from October 30, 2020.