The National Stock Exchange (NSE) has recently made a significant move to encourage retail participation, improve capital market liquidity, and proliferate the F&O segment in India. In an effort to attract active traders, the NSE has decided to reduce the lot size of BankNifty from 25 to 15. The revised regulation will come into effect starting from the commencement of the July 2023 contracts. It’s important to note that contracts purchased in April/May/June 2023 with an expiry of 3 months or more will still mature with respect to 25 lots only.
This change in lot size is not new, as it has been changed multiple times since 2015. However, this latest move is expected to rejuvenate the options market and attract more enthusiasts who have less capital but meticulous brains.
| Year | Lot Size |
| Aug’15 – April’16 | 30 |
| April’16 – Oct’18 | 40 |
| Oct’18 – May’20 | 20 |
| May’20 – July’23 | 25 |
| From July’23 | 15 |
The F&O participation in India has been low, with only 3% of Indian households investing in the stock market. Furthermore, barely 45 lakhs Indians are invested in the F&O segment, with a lack of robust buyers failing to bring skin in the game.
However, this change in lot size is expected to encourage more retail participation in the F&O segment. AlgoBulls is making it easier for traders with limited capital to actively participate. Our platform provides algorithmic option strategies with pre-defined entry-exit points, target-stop loss orders, and low capital requirements. Additionally, our platform also provides paper trading and backtesting features, allowing traders to test their strategies before committing real money.
In conclusion, NSE’s move to reduce the lot size of BankNifty is a step towards promoting retail participation and improving capital market liquidity in India. At AlgoBulls, enthusiastic traders can now actively participate in the F&O segment and benefit from the opportunities available.
