Revision in lot size of stock F&O contracts | Espresso

Revision in Lot Size of Stock FO Contracts

After Covid 19, the Indian market has grown significantly, and traders are attracted to it. However, futures and options are the foremost options for traders, as it allows them to make money more quickly compared to others trading. Recently, the number of Demat accounts has also grown exponentially, and technological advancement contributed to it. According to the latest update in futures trading, NSE is set to revise the lot size of 33 stocks, and SEBI ( Securities and Exchange Board of India) has mandated that 5- 10 lakh will be the range of contract value for F&O contracts.

Published on 04 October 2023

Moreover, it is vital to understand that SEBI and stock exchanges revise the lot size after communicating to offer a balance to the market. It also gives time for new traders to adjust options and futures trading strategies. In this blog, we will deep dive into revision in lot size of stock and more.

Understanding Future and Options (F&O)

Futures and Options (F&O) are financial derivatives widely used in the share market to manage risk, speculate, and hedge against price movements in various assets, such as stocks, commodities, currencies, and indices, without owning them.

Future Contracts: The futures contract is an agreement between two parties to buy or sell the stocks at a predetermined rate on a particular date in the future. Buyer and seller are obliged to buy and sell the stock, respectively, on the contract's expiration date. Future trading can be used as a risk management tool for hedging or speculating the price movement in a stock's future. Generally, futures trading is done in organized exchanges, facilitating liquidity and transparency.

Options Contract: A holder of an underlying asset can buy or sell an underlying asset at a predetermined rate even before the expiration date. There is no obligation about it. The option buyer needs to pay the seller a premium to get this right. This contract offers flexibility for various trading. There are two options in the contract: call and put. The call is profitable in upward price movement, and the put is profitable in downward price movement.

Why Do People Prefer F&O?

Futures and options (F&O) are popular forms of trading and offer various advantages to traders.

Risk Management: This is one of the main reasons people get attracted to F&O and choose the best futures trading platform. Risk management is one of the advantages of futures trading for beginners, as one can set the price and protect themselves from future hikes.

Leverage: It allows traders to trade big with little money and make a bigger profit with the best options and futures trading strategies.

Volatility: Traders can make money using the best futures trading platform when markets change significantly.

Diversification: In F&O markets, traders get a wide range of access, including assets, such as currencies, commodities, etc. It offers traders to diversify their options and futures trading strategies.

 

Exploring Changes in Lot Size (Existing & New)

Upward Revision

Underlying

Symbol

Present Market Lot

Revised Market Lot

Aarti Industries Limited

AARTIIND

850

1000

ACC Limited

ACC

250

300

Adani Enterprises Limited

ADANIENT

250

300

Adani Ports and Special Economic Zone Limited

ADANIPORTS

625

800

Aurobindo Pharma Limited

AUROPHARMA

1000

1100

Bandhan Bank Limited

BANDHANBNK

1800

2500

Bata India Limited

BATAINDIA

275

375

Biocon Limited

BIOCON

2300

2500

Chambal Fertilizers & Chemicals Limited

CHAMBLFERT

1500

1900

Crompton Greaves Consumer Electricals Limited

CROMPTON

1500

1800

Deepak Nitrite Limited

DEEPAKNTR

250

300

Divi’s Laboratories Limited

DIVISLAB

150

200

Dixon Technologies (India) Limited

DIXON

125

200

Godrej Properties Limited

GODREJPROP

425

475

Hindustan Copper Limited

HINDCOPPER

4800

5300

Indiabulls Housing Finance Limited

IBULHSGFIN

4000

5100

ICICI Lombard General Insurance Company Limited

ICICIGI

425

500

Vodafone Idea Limited

IDEA

70000

80000

IndusInd Bank Limited

INDUSINDBK

450

500

Indus Towers Limited

INDUSTOWER

2800

3400

Intellect Design Arena Limited

INTELLECT

1000

1300

Dr Lal Path Labs Ltd.

LALPATHLAB

250

300

Laurus Labs Limited

LAURUSLABS

1100

1700

United Spirits Limited

MCDOWELL-N

625

700

Max Financial Services Limited

MFSL

650

800

Samvardhana Motherson International Limited

MOTHERSON

6750

7100

Info Edge (India) Limited

NAUKRI

125

150

Piramal Enterprises Limited

PEL

550

750

Tata Chemicals Limited

TATACHEM

500

550

Whirlpool of India Limited

WHIRLPOOL

350

400

Downward Revision

Underlying

Symbol

Present Market Lot

Revised Market Lot

Apollo Tyres Limited

APOLLOTYRE

3500

1700

Axis Bank Limited

AXISBANK

1200

625

NTPC Limited

NTPC

5700

3000

Wrapping Up

Futures and Options (F&O) is one of the trader’s choices, and after Covid 19, there has been a surge in Demat accounts. Traders are attracted to F&O because it offers quick money compared to other trading types. However, the stock exchange and SEBI communicate before revising the lot size of underlying assets to balance the market. It gives time to traders to make options and futures trading strategies and trade.

Chandresh Khona
Team Espresso

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