Change in F&O lot size sends shivers in Dalal Street
As if the markets didn’t have enough on their plate already, the change in lot size for F&O contracts has sent market players scurrying for cover. In Dec-08, NSE had announced changes in the lot sizes of contracts, to be effective from March 2009.
As per SEBI regulations, F&O contracts have to be worth Rs.2 lakh. With the financial meltdown, most stocks covered under F&O are now trading at less than half their value. This has led to an increase in the total no. of shares per lot, which means traders will need to shell out more cash for these additional margins. A total of around 243 stocks are likely to be affected with this move.
However, the Nifty lot size has been left unchanged so this could lead to increased trading in index futures rather than stock futures.
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