SEBI Revises Minimum Contract Size in Equity Derivatives to 5 Lakhs

SEBI today in its circular announced the minimum contract size for equity derivatives from Rs.200,000 to Rs 5,00,000 effective from 30th October 2015 (Post October 2015 Expiry).
Minimum lot size for stocks reduced to 50 and in multiple of 25 there after. For high value stocks minimum lot size fixed at 10 and multiple of 5. Index minimum lot size fixed at 10 and multiple of 5 there after.
It is also stated in the circular that “The stock exchanges shall jointly ensure that the lot size is same for an underlying traded across exchanges.”
The move will prevent individuals and small traders from making themselves vulnerable to high-risk speculation. But on the other side it will put a full stop for small traders entering and trading the derivative segment as the trading for them goes very expensive. Even the trade will be going to be expensive for full time traders and HNI clients. Also possibly this could drive large volumes to the illegal ‘dabba’ or off-market trade.


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