NSE to increase lot sizes of 243 derivatives contracts

Tags: News
The National Stock Exchange (NSE) will soon increase the present market lots of 243 equity derivatives contracts after their value fell below the prescribed minimum level of Rs 200,000 due to a sharp fall in stock prices this year.

As per the new changes, which would be effective from December 26, the existing lot size of derivatives contracts (futures and options popularly known as F&Os) of 243 companies would be multiplied by two or its multiples.

However, the proposed change would be applicable to contracts expiring in March 2009 (three months contracts) and later. Derivatives contracts, expiring in January 2009 (one month) and February 2009 (two months), would continue to have the existing market lots.

After the latest change, the lot size of derivatives contracts of Reliance Industries would go up to 300 from 75 (multiplied by four) at present. The lot size for derivatives contracts of other blue-chip companies like ICICI Bank (from 175 to 700), Larsen & Toubro (from 100 to 400), Bharti Airtel (from 250 to 500) and Tata Consultancy Services (from 250 to 500) would also go up effective from December 26.

In case of two companies — Sterling Biotech and Lupin, whose derivatives contracts have market value of more than Rs 4,00,000 lakh — the exchange has proposed to halve their lot sizes effective December 26. The move will be applicable to derivatives contracts of all expiries of these two companies, the exchange said in a circular.

NSE periodically reviews the contract sizes or value of derivatives contracts based on the prescribed minimum value of Rs 2,00,000 as per the guidelines of the Securities and Exchange Board of India (Sebi).

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