Nifty Lot Size Reduced From 50 to 25 What Should You Do

Open ZERO Brokerage FREE Share Trading Account - Buy and Sell Stocks Without Brokerage - Set GTT (Good Till Triggered) Orders on System and Forget

As of April 26, 2024, the National Stock Exchange (NSE) has reduced the lot size of Nifty futures and options contracts to 25 shares for all expiries, including weekly, monthly, quarterly, and half-yearly. This is a reduction from the previous lot size of 50. The NSE has also reduced the market lot of Nifty Financial Services from 50 to 25 and Nifty Midcap Select from 75 to 50, but these changes will take effect from July expiries. The lot size for Bank Nifty remains unchanged at 15.

Now the question is – do you need to change your trading strategy?

No. Do not change your trading strategy, if you win most of the time. If you lose more than 50% of the time – then you need to change your strategy anyway, or else you will keep losing. You can do my Nifty Conservative Options Course and start making consistent profits.

What about the margin?

Yes with the reduction in lot size, the margin has reduced. I see that if I create a Call Debit Spread on Nifty at 22,500 then the total margin blocked will be Rs. 11,250 – which is almost half of what was required when the Nifty lot size was 50.

For selling naked options and selling / buying naked futures – approx Rs. 64,000/- is required.  Earlier it was over 1 lakh.

What about profit and loss?

Of course, when you are risking less, the profit and loss will also reduce by the same percentage. Whatever profits you used to make earlier on one lot will now be reduced by 40-50%.

Suppose earlier when the lot size was 50 – and you made a profit of 20 points. Your profit would have been:
20 * 50 = 1000.

However now for the same 20 points profit your profit in terms of cash will be:
20 * 25 = 500 – that’s a 50% reduction.

What should you do if you are a good trader and want to make the same profits?

There is only one way out. Double the number of lots to trade. Suppose You traded with 5 lots when the nifty lot size was 50 – now to make the same profit you have to trade with 10 lots. In this case, everything will be the same. The margin blocked will be the same and the profit and loss will be the same as earlier.

However, as General Elections 2024 are going on, trading with fewer lots is recommended. Once the elections are over – you can trade with whatever number of lots you are comfortable in.

COPYRIGHT INFRINGEMENT: Any act of copying, reproducing or distributing any content in the site or newsletters, whether wholly or in part, for any purpose without my permission is strictly prohibited and shall be deemed to be copyright infringement.

INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However, every trade depends on the trader and his level of risk-taking capability, knowledge and experience. Moreover, stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website.

DISCLAIMER: I am NOT an Investment Adviser (IA). I am an Authorized Person (AP) of a Stock Broker. I do not give tips or advisory services by SMS, Email, WhatsApp or any other forms of social media. I strictly adhere to the laws of my country. I only offer education for free on finance, risk management & investments in stock markets through the articles on this website. You must consult an authorized Investment Adviser (IA) or do thorough research before investing in any stock or derivative using any strategy given on this website. I am not responsible for any investment decision you take after reading an article on this website. Click here to read the disclaimer in full.

Disclaimer | Privacy Policy | About Me | Conservative Option Course
Find 200+ testimonials of my course:
What Traders Say About This Course

My student gets the Winner's Certificate of Zerodha 60-day Challenge - Click here and Open Stock Buy and Sell Free Account with Them Today!!!

Open ZERO Brokerage FREE Share Trading Account - Buy and Sell Stocks Without Brokerage - Set GTT (Good Till Triggered) Orders on System and Forget

Traditional brokers charge a lot for brokerage; however, this broker does not charge anything for stock buying and selling. Also, you can set GTT (Good Till Triggered) order after buying a stock, so that the system can sell the stock automatically at your target price even if you are not monitoring the market. Only 25k is blocked for option selling with hedge. Also, you get a lifetime free account in Sensibull (virtual trading app & strategy builder) which charges Rs.800/-+GST a month. It takes 5 minutes to open an account online. Click here and Open Free Account with Them Today >>