BSE Sensex and NSE Nifty New Lot Size Changes Effective from 20 Nov

BSE Sensex and NSE Nifty will see changes in their lot size in November. As per SEBI, the Index derivatives contract size will increase to Rs 15 Lakh to Rs 20 Lakh in the first phase. To meet the regulatory requirements BSE and NSE announced new lot size of their respective indices effective from Wednesday, 20 November 2024.

NSE Nifty and BSE Sensex Lot Size Changes in November 2024

NSE Nifty lot size increased from 25 quantity to 75 quantity which will significantly impact retail traders. Earlier, a trader used to buy 1 lot of Nifty ATM options under Rs 5000, but after the increase in lot size, a trader would now require more money for buying 1 Lot. NSE Banknifty lot size will increase from 15 to 30 and NSE Finnifty lot size will increase from 25 to 65.

BSE Sensex lot size increased from 10 quantity to 20 quantity which will significantly impact many new traders. The BSE Bankex lot size will increase from 15 quantity to 30 quantity.

These changes in the lot sizes will apply to all new index derivative contracts, including weekly, monthly, quarterly, and half-yearly contracts. The existing weekly and monthly expiry contracts will continue with the existing lot sizes till their respective expiry dates.

Quarterly and half-yearly existing expiry contracts will be transitioned to the new lot sizes on December 24, 2024, for Bank Nifty, and December 26, 2024, for Nifty.

Sectoral Index Weekly Expiry Discontinued

The discontinuation of sectoral index weekly option contracts of BankNifty, Nifty Midcap, and FinNifty, Bankex, Sensex 50, can be both challenges and opportunities for retail traders. Here's what you need to consider:

●  Adapting Strategies: The traders using these indices for their weekly strategy will need to re-construct their strategies. There is a need to reassess plans for trading and focus more on the Nifty 50 Index.

●  Liquidity in Nifty 50: After removing options from the other indices, it's sure to see an increase in the liquidity of Nifty 50, therefore reducing the spreads and offering better prices to traders.

●  Potential for New Products: The NSE would offer new products or features that are especially suited to the needs of traders who are focusing on the Nifty 50 Index. This will remain a very important area of monitoring.

Conclusion

BSE Sensex and NSE Nifty lot size changes will have short-term impact on the market. The F&O volume might decline for a few months until the market adjusts to the new changes.

Also, the discontinuation of sectoral  indices weekly expiry will shift many weekly expiry traders to Sensex and Nifty. Due to that, massive increase in Nifty and Sensex open interest is possible.