This is just a guideline that is used by NSE to determine the lot size of any contract.
Say for ex a stock priced at 100 rs. will have lot size of 2000 giving us the contract value of approximatelly 2 Lac.
In next few months, if stock goes up to 225 Rs. then the value of a contract lot will be
225* 2000 = 4.5 Lac.
Thats when NSE will adjust the lot size and reduce it to say 100, so that the new contract value comes to the level of 225*1000 = 2.25 lac. (approximately close to 2Lac)
As a result of 2008 bear market, many stock fell by over 50%.. so the value of their 1 lot was even less then 1 lac. That results in excessive leveraged trading in market hence NSE stepped in and increased the lot size of many contracts.
But they decided to leave Nifty Lot size to 50.
For trading purpose, just look at the contract size cause thats what matters. Let NSE guys decide on what shd be lot size.
Sameer don't get me wrong but as I suggested in my previous post, do chk out the material at NSE site. That will answer most of your entry-level questions.
Happy Trading
Say for ex a stock priced at 100 rs. will have lot size of 2000 giving us the contract value of approximatelly 2 Lac.
In next few months, if stock goes up to 225 Rs. then the value of a contract lot will be
225* 2000 = 4.5 Lac.
Thats when NSE will adjust the lot size and reduce it to say 100, so that the new contract value comes to the level of 225*1000 = 2.25 lac. (approximately close to 2Lac)
As a result of 2008 bear market, many stock fell by over 50%.. so the value of their 1 lot was even less then 1 lac. That results in excessive leveraged trading in market hence NSE stepped in and increased the lot size of many contracts.
But they decided to leave Nifty Lot size to 50.
For trading purpose, just look at the contract size cause thats what matters. Let NSE guys decide on what shd be lot size.
Sameer don't get me wrong but as I suggested in my previous post, do chk out the material at NSE site. That will answer most of your entry-level questions.
You can find out a lot of basic info about F&O trading from help section of your broker's site. You can also refer to NSE site and education/certification section there has nice study material addressing most of the basic questions.
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