Reduction in Lot Sizes for Nifty and Bank Nifty
The National Stock Exchange (NSE) has announced important changes in the market lot sizes for Index Derivatives. According to new SEBI guidelines, these changes will come into effect on October 28, 2025. Index Derivatives’ lot sizes for various indices such as Nifty 50, Bank Nifty, and Nifty Financial Services will be reduced. This change aims to provide relief to traders by making positions more affordable and flexible.
When Will the New Rules Be Implemented?
The new regulations will start applying from January 2026 in terms of weekly and monthly contract expirations for Index Derivatives. Additionally, quarterly and semi-annual contracts will have these lot size changes enforced from December 30, 2025. This phased implementation ensures a smooth transition for market participants.
Impact on Big Indices and Traders
The changes will primarily affect large indices like Nifty 50, Bank Nifty, and Nifty Financial Services. Traders will need to adjust their portfolios to align with the new lot sizes.
Benefits for Retail Investors
Lower Capital Requirement for Trading
With reduced lot sizes, trading futures and options will require less capital upfront. For example, if the Nifty 50 price is 20,000, the old lot size was 75 units, meaning a trader had to manage a position worth ₹15 lakh. Under the new lot size of 65 units, the same position would require ₹13 lakh only, saving around ₹2 lakh.
Reduced Risk for Traders
A smaller lot size means the potential loss in case of market reversal is lower. This provides a safety cushion for new traders who want to manage risk more effectively, encouraging broader participation.
Increased Flexibility in Portfolio Management
With smaller lots, traders can better manage and diversify their trades. For instance, someone with an existing lot of Bank Nifty can adjust positions more precisely rather than handling large, cumbersome lot sizes. The change enhances trading flexibility, especially for those focused on trading strategies involving adjustments or partial exits.
Specific Lot Size Changes
| Index | Old Lot Size | New Lot Size |
|---|---|---|
| Nifty 50 | 75 | 65 |
| Bank Nifty | 35 | 30 |
| Nifty Financial Services | 65 | 60 |
| Nifty Midcap Select | 140 | 120 |
| Nifty Next 50 | 25 | No change |
Summary
The reduction in lot sizes for major indices on the NSE is a significant move to democratize futures and options trading by lowering capital requirements and risks. This regulatory update will live from October 28, 2025, with full contract-based implementation by January 2026.