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NSE/BSE F&O Stock with Lot Size

14 Mins 01 Jun 2023 0 COMMENT

Futures and options (F&O) refer to the market segment where derivatives based on underlying assets such as stocks, currency, or commodities are traded. These derivatives are usually of two types – futures and options.

In futures contracts, two parties agree to buy or sell an underlying asset at a future date, at a predetermined price. The buyer of the futures contract is obligated to buy the underlying asset, while the seller of the futures contract is obligated to sell the underlying asset. In options contracts, two parties agree to give the buyer the right, but not the obligation, to buy or sell an underlying asset at a future date, at a predetermined price. For this right, the buyer pays a small amount called a ‘premium’.

The F&O segment can be used by investors and traders to hedge against market risks, speculate on market movements, or generate additional income. However, F&O trading involves a high level of risk and should be used only after understanding the market.

If a trader is willing to trade in the F&O segment, he or she can sign up with a stock trading app and open a trading account. Once the account is opened, he or she can trade F&O contracts of desired stocks or securities.

However, not every stock is traded in the F&O segment. As of February 2023, there are 191 stocks in the F&O segment. Besides, there are four indices for which contracts are available. This is against nearly 2,000 stocks that are listed on National Stock Exchange (NSE).

Criteria to enter the F&O segment

As stated earlier, barely 10 per cent of listed stocks are part of the F&O segment, this is simply because there are strict criteria for a stock to be included in this segment. These criteria have been laid down following Securities and Exchange Board of India (Sebi) guidelines.

The criteria include average daily market capitalization, average daily traded value, the market wide position limit in the security, the quarter sigma values, and the average daily deliverable value, among others.

According to NSE, a stock needs to satisfy the following criteria for entry into and stay in the F&O segment:

  • The stock should be among the top 500 stocks in terms of average daily market capitalisation and average daily traded value in the previous six months on a rolling basis.
  • The stock’s median quarter sigma order size over the last six months shall be not less than Rs 25 lakh.
  • The market wide position limit or MWPL in the stock shall not be less than Rs 500 crore on a rolling basis.
  • The average daily delivery value in the cash market should not be less than Rs 10 crore in the previous six months on a rolling basis. This is simply the calculation of the value of all delivery trades.

F&O Lot size

The F&O segment differs from the cash segment -- where you buy or sell the underlying instead of derivatives – in many ways. One such thing is the contracts available for trading in the F&O segment have predetermined lot sizes, that is, they are standardised. This means you do not have the liberty to fix the number of shares that you want to buy or sell in the contract. For instance, if the lot size for a stock is fixed at 50, then you need to trade contracts with 50 shares, 100 shares, 150 shares and so on. You cannot buy or sell a contract of 75 shares.

Please note that there are certain markets that provide non-standardised contracts (for example 75 shares), but they are often referred to as over the counter (OTC) products.

The lot size is relative to the prevailing market price of the underlying. The exchange may, from time to time, change the lot size of contracts as stock price move. The exchange will notify the traders ahead of time if it makes such a move. Though once a lot size is fixed for a contract, it will not be changed until the contract expires.

The lot size of the contract also determines the margin money required for a trader to trade in a security. Thus, exchanges ensure that lot size is fixed in such a way that an average trader can trade the security and the market remains liquid.

NSE F&O Indices with Lot Size

India is the largest derivative market in the world, going by the number of contracts that are traded. Futures and options contracts of Nifty50 – which is the flagship index of NSE – are one of the most traded derivatives. Besides, there are three more indices for which derivatives are available. Below is the lot size for each of them

 

Underlying

Symbol

Lot Size

Nifty 50

NIFTY    

50

Nifty Bank

BANKNIFTY

15

Nifty Mid Select

MIDCPNIFTY

75

Nifty Financial Services

FINNIFTY 

40

*Data as of 15 Sept 2023

As stated earlier, there are over 190 stocks that are part of the F&O segment. Below are some of them with the highest lot size and lowest lot size.

Top 10 F&O stocks according to highest lot size

Underlying

Symbol

Lot Size

Vodafone Idea Limited               

IDEA     

80,000

GMR Airports Infra Ltd             

GMRINFRA 

22,500

Punjab National Bank               

PNB      

16,000

IDFC First Bank Limited            

IDFCFIRSTB

15,000

BHEL                               

BHEL     

10,500

IDFC Limited                       

IDFC     

10,000

Indian Oil Corporation Ltd                

IOC      

9,750

Gail (India) Ltd                   

GAIL     

9,150

L&T Finance Holdings Ltd           

L&TFH    

8,924

Rec Limited                        

RECLTD   

8,000

*Data as of 15 Sept 2023

Top 10 F&O stocks according to lowest lot size

Underlying Symbol Lot Size
MRF Ltd                             MRF       10
Page Industries Ltd                 PAGEIND   15
Shree Cement Limited SHREECEM  25
Nestle India Limited                NESTLEIND 40
Abbott India Limited                ABBOTINDIA 40
Bosch Limited                       BOSCHLTD  50
Atul Ltd                            ATUL      75
Maruti Suzuki India Ltd.            MARUTI    100
ULTRATECH CEMENT LIMITED            ULTRACEMCO 100
APOLLO HOSPITALS APOLLOHOSP 125

*Data as of 15 Sept 2023

F&O Lot Size FAQs

How frequently does the lot size change?

The stock exchange determines the lot size of a stock. It can change the lot size from time to time based on various factors such as the stock’s trading volume, price, liquidity and market capitalization. The frequency of lot size changes is not predetermined. Generally, bourses provide advance notice to market participants before making any changes to the lot size of a particular stock or index.

Where can I see the change in F&O Lot size?

The change in the lot size of a particular stock is announced by the stock exchange(s) where it is listed. The stock exchanges usually issue circulars, press releases or notifications on the exchange’s website detailing the change in the lot size.

You can visit the website of the stock exchanges such as the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) to access the latest information on F&O lot size changes. The lot size for each stock is listed on the exchange’s website and can be easily found by searching for the stock symbol or name. Moreover, many online trading platforms like IDirect also provide information on lot size changes and other relevant news related to F&O trading.

What is the impact of lot size?

The impact of lot size on F&O trading depends on several factors, such as the trading strategy, risk appetite, and available capital.

Firstly, a smaller lot size may require a lower amount of capital to initiate a trade, making it accessible to small traders. On the contrary, a larger lot size may require a larger amount of trading capital. As lot size determines the minimum quantity that can be traded, the traders will not be able to trade any amount of shares they desire. This brings a lack of flexibility in position sizing in F&O trading which may impact trading strategy. Moreover, the lot size can also impact the liquidity of a stock and traders’ risk management strategy.

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