SEBI Standardises Lot sizes to round figure numbers

rkkarnani

Well-Known Member
#2
HTML:
GENERAL MANAGER
DERIVATIVES AND NEW PRODUCTS DEPARTMENT
SEBI/DNPD/Cir- 50/2010
January 8, 2010
To
Managing Director / Chief Executive Officer
Stock Exchanges / Equity Derivatives Segment of Stock Exchanges
and their Clearing Houses/Corporations
Dear Sir,
SUB: Standardized lot size for derivative contracts on individual securities
In consultation with Stock Exchanges, it has been decided to standardize the lot
size for derivative contracts on individual securities as under:
Price Band (Rs.) Contract Size
Lot Size
(No. of units of underlying) Value (Rs. lakh)
≥1601 125 ≥ 2
801 - 1600 250
401 - 800 500
201 - 400 1,000
101 - 200 2,000
51 - 100 4,000
25 - 50 8,000
< 25 A multiple of 1000
≥ 2 ≤ 4
Explanation: The lot size for an underlying with a price of Rs. 250, i.e., in the
price band of Rs. 201-400, shall be 1000 units.
2. The Stock Exchanges shall review the lot size once in every 6 months based
on the average of the closing price of the underlying for last one month and
Page 2 of 2
wherever warranted, revise the lot size by giving an advance notice of atleast 2
weeks to the market. If the revised lot size is higher than the existing one, it will
be effective for only new contracts. In case of corporate action, the revision in lot
size of existing contracts shall be carried out as per SEBI circular
SMDRP/DC/CIR-15/02 dated December 18, 2002.
3. The Stock Exchanges shall ensure that the lot size is same for an
underlying traded across Exchanges.
4. This Circular is issued in exercise of the powers conferred under Section
11 (1) of the Securities and Exchange Board of India Act 1992, read with Section
10 of the Securities Contracts (Regulation) Act, 1956 to protect the interests of
investors in securities and to promote the development of, and to regulate the
securities market and shall come into effect from March 31, 2010.
5. This Circular supersedes SEBI circular SEBI/DNPD/Cir-20/2004/02/23 dated
February 23, 2004.
6. This Circular is available on SEBI website at www.sebi.gov.in., under the
category Derivatives- Circulars.
Yours faithfully,
Sujit Prasad
 
#4
A step forward, however it could have been standardized at 100 irrespective of price, like the US.
Lot sizes of 100 would increase volumes too.
I second that. Irrespective of value, if a standard lot size of 100 will be good. Let us see.
 

hitesh

Active Member
#5
A step forward, however it could have been standardized at 100 irrespective of price, like the US.
Lot sizes of 100 would increase volumes too.
There is a history for keeping lot size at minimum of Rs. 2L.

There was a forward/Badla trading on BSE and ALBM on NSE. The lot size of underlying was considered as a lot size for such product. Hence the lotsize of forward/Badla/ALBM was 1 / 10 / 50 / 100 share, as the case may be.

After IT Bubble, it was observed that due to minimum lot size, many small investors were trading in such product and they lost heavily.

So just to keep small investors away from taking part on such risky instruments, minimum lot size of Rs. 2L was suggested and implemented.
 

rkkarnani

Well-Known Member
#6
Changes to be effective 30th April, major change in July Contract onwards!!!

http://www.nseindia.com/content/circulars/faop14475.pdf

Code:
FUTURES AND OPTIONS SEGMENT
Circular No. 029
Sub: Revision of Market Lot of Derivative Contracts on Individual Stocks
SEBI has advised exchange to standardize lot size for derivative contracts on individual
securities once in every 6 months as per circular no. SEBI/DNPD/Cir- 50/2010 dated
January 8, 2010. In pursuance to the revised methodology mentioned in the SEBI circular,
it is proposed to carry out revision of market lot for derivatives contracts as follows:
Sr
No
Underlying whose
Derivative contract size
shall be
Count of
Underlying
Effective date Annexure
Number
1 Revised Downwards 13
April 30, 2010
(for all contracts)
1
2
Revised Downwards but
new lot size is not a
multiple of old lot size
111
April 30, 2010
(for July 2010 & later
expiries)
2
3 Revised Upwards 59
April 30, 2010
(for July 2010 & later
expiries)
3
4 Unchanged 07 -
4
To avoid operational complexities, in case 2 & 3 above, following will be applicable:
1. Only the far month contract i.e. July 2010 expiry contracts will be revised for
market lots. Contracts with maturity of May 2010 and June 2010 would continue
to have the existing market lots. All subsequent contracts (i.e., July 2010 expiry
and beyond) will have revised market lots.
2. The day spread order book will not be available for the combination contract of
June 2010 – July 2010 expiry.
For the purpose of the computation, the average of the closing price of the underlying has
been taken for last one month period of March 2010.
This circular shall come into effect from April 30, 2010.
For and on behalf of
National Stock Exchange of India Limited
Suprabhat Lala
Asst. Vice President
Date: Mar 31, 2010
Download No: 14475
022-26598151
022-26598152
Dipesh Sahoo
Altaf Shaikh
Sachin Dhar
022-26598449
[email protected]
No of Pages: 6
Annexure-1
List of underlying in which market lot is being revised downwards:
S.No Underlying Symbol
Present
Market
Lot
Revised
Market
lot
1 ABB LTD. ABB 500 250
2 BHARAT FORGE LTD BHARATFORG 2000 1000
3 BHUSHAN STEEL LIMITED BHUSANSTL 500 125
4 GREAT OFFSHORE LTD GTOFFSHORE 1000 500
5 HINDUSTAN ZINC LIMITED HINDZINC 500 250
6 IVRCL INFRAST & PROJ LTD. IVRCLINFRA 2000 1000
7 JINDAL SAW LIMITED JINDALSAW 5000 1000
8 PATEL ENGINEERING LTD. PATELENG 1000 500
9 PIRAMAL HEALTHCARE LTD PIRHEALTH 1500 500
10 SESA GOA LTD SESAGOA 1500 500
11 SUN TV NETWORK LIMITED SUNTV 1000 500
12 TATA CONSULTANCY SERV LT TCS 1000 500
13 TULIP TELECOM LIMITED TULIP 500 250
Annexure-2
List of underlying in which market lot is being revised downwards but new lot size is not a
multiple of old lot size:
S. No Underlying Symbol
Present
Market Lot
Revised
Market lot
1 ABAN OFFSHORE LTD. ABAN 400 250
2 ADITYA BIRLA NUVO LIMITED ABIRLANUVO 400 250
3 ACC LIMITED ACC 376 250
4 ALLAHABAD BANK ALBK 2450 2000
5 AMBUJA CEMENTS LTD AMBUJACEM 4124 2000
6 ANDHRA BANK ANDHRABANK 2300 2000
7 ALSTOM PROJECTS INDIA LTD APIL 600 500
8 ASHOK LEYLAND LTD ASHOKLEY 9550 4000
9 ASIAN PAINTS LIMITED ASIANPAINT 200 125
10 AUROBINDO PHARMA LTD AUROPHARMA 700 250
11 AXIS BANK LIMITED AXISBANK 450 250
12 BAJAJ AUTO LIMITED BAJAJ-AUTO 200 125
13 BANK OF BARODA BANKBARODA 700 500
14 BHARAT ELECTRONICS LTD BEL 276 125
15 BEML LIMITED BEML 375 250
16 BHEL BHEL 150 125
17 BIOCON LIMITED. BIOCON 1800 1000
18 BHARAT PETROLEUM CORP LT BPCL 550 500
19 BOMBAY RAYON FASHIONS LTD BRFL 1150 1000
20 CAIRN INDIA LIMITED CAIRN 1250 1000
21 CANARA BANK CANBK 800 500
22 CENTURY TEXTILES LTD CENTURYTEX 848 500
23 CESC LTD CESC 1100 1000
24 CHENNAI PETROLEUM CORP LT CHENNPETRO 1800 1000
25 CIPLA LTD CIPLA 1250 1000
26 COLGATE PALMOLIVE LTD. COLPAL 550 500
27 CROMPTON GREAVES LTD CROMPGREAV 1750 1000
28 CUMMINS INDIA LTD CUMMINSIND 950 500
29 DABUR INDIA LTD DABUR 2700 2000
30 DECCAN CHRONICLE HOLD LTD DCHL 3400 2000
31 DENA BANK DENABANK 5250 4000
32 DIVI'S LABORATORIES LTD DIVISLAB 620 500
33 DR. REDDY'S LABORATORIES DRREDDY 400 250
34 FIRSTSOURCE SOLU. LTD. FSL 9500 8000
35 GAIL (INDIA) LTD GAIL 1125 500
36 THE GE SHPG.LTD GESHIP 1200 1000
37 GLAXOSMITHKLINE PHARMA LT GLAXO 300 125
38 GRASIM INDUSTRIES LTD GRASIM 176 125
39 GUJARAT STATE PETRO LTD GSPL 6100 4000
40 GTL LTD GTL 750 500
41 HINDUSTAN CONSTRUCTION CO HCC 2100 2000
42 HCL TECHNOLOGIES LTD HCLTECH 1300 1000
43 HDFC LTD HDFC 150 125
44 HDFC BANK LTD HDFCBANK 200 125
45 HERO HONDA MOTORS LTD HEROHONDA 200 125
46 HINDALCO INDUSTRIES LTD HINDALCO 3518 2000
47 ICICI BANK LTD. ICICIBANK 350 250
48 IDBI BANK LIMITED IDBI 2400 2000
49 INFRA. DEV. FIN. CO. LTD IDFC 2950 2000
50 IFCI LTD IFCI 7880 4000
51 INDIA INFOLINE LIMITED INDIAINFO 2500 2000
52 INDIAN BANK INDIANB 2200 2000
53 INFOSYS TECHNOLOGIES LTD INFOSYSTCH 200 125
54 INDIAN OIL CORP LTD IOC 1200 1000
55 ISPAT INDUSTRIES LIMITED ISPATIND 12450 11000
56 ITC LTD ITC 1125 1000
57 JINDAL STEEL & POWER LTD JINDALSTEL 960 500
58 JSW STEEL LIMITED JSWSTEEL 412 250
59 KINGFISHER AIRLINES LTD KFA 4250 4000
60 KOTAK MAHINDRA BANK LTD KOTAKBANK 550 500
61 K S OILS LIMITED KSOILS 5900 4000
62 LIC HOUSING FINANCE LTD LICHSGFIN 425 250
63 LANCO INFRATECH LTD. LITL 6380 4000
64 LARSEN & TOUBRO LTD. LT 200 125
65 LUPIN LIMITED LUPIN 350 250
66 MAHINDRA & MAHINDRA LTD M&M 624 250
67 MERCATOR LINES LIMITED MLL 4900 4000
68 MPHASIS LIMITED MPHASIS 800 500
69 MRPL MRPL 4450 4000
70 NOIDA TOLL BRIDGE CO LTD NOIDATOLL 8200 8000
71 NTPC LTD NTPC 1625 1000
72 ORACLE FIN SERV SOFT LTD. OFSS 300 125
73 OPTO CIRCUITS (I) LTD. OPTOCIRCUI 2040 1000
74 ORCHID CHEM & PHARMA LTD ORCHIDCHEM 2100 2000
75 ORIENTAL BANK OF COMMERCE ORIENTBANK 1200 1000
76 PATNI COMPUTER SYST LTD PATNI 1300 500
77 PETRONET LNG LIMITED PETRONET 4400 4000
78 POWER FIN CORP LTD. PFC 1200 1000
79 PUNJAB NATIONAL BANK PNB 300 250
80 POLARIS SOFTWARE LAB LTD POLARIS 2800 2000
81 PTC INDIA LIMITED PTC 2350 2000
82 RANBAXY LABS LTD RANBAXY 800 500
83 RURAL ELEC CORP. LTD. RECLTD 1950 1000
84 RELIANCE INDUSTRIES LTD RELIANCE 300 250
85 RELIANCE INFRASTRUCTU LTD RELINFRA 276 250
86 SHREE RENUKA SUGARS LTD RENUKA 5000 2000
87 STEEL AUTHORITY OF INDIA SAIL 1350 1000
88 STATE BANK OF INDIA SBIN 132 125
89 SHIPPING CORP OF INDIA LT SCI 2400 2000
90 SIEMENS LTD SIEMENS 752 500
91 SINTEX INDUSTRIES LTD SINTEX 1400 1000
92 STERLITE INDS (IND) LTD STER 438 250
93 STERLING BIOTECH LTD STERLINBIO 2500 2000
94 SUN PHARMACEUTICALS IND. SUNPHARMA 225 125
95 TATA CHEMICALS LTD TATACHEM 1350 1000
96 TATA MOTORS LIMITED TATAMOTORS 850 500
97 TATA STEEL LIMITED TATASTEEL 764 500
98 TATA TEA LTD TATATEA 550 250
99 TECH MAHINDRA LIMITED TECHM 600 250
100 TITAN INDUSTRIES LTD TITAN 206 125
101 TRIVENI ENGG. & INDS. LTD TRIVENI 3850 2000
102 TATA TELESERV(MAHARASTRA) TTML 10450 9000
103 UCO BANK UCOBANK 5000 4000
104 ULTRATECH CEMENT LIMITED ULTRACEMCO 400 250
105 UNION BANK OF INDIA UNIONBANK 1050 1000
106 UNITECH LTD UNITECH 4500 4000
107 VOLTAS LTD VOLTAS 2700 2000
108 WELSPUN GUJ ST. RO. LTD. WELGUJ 1600 1000
109 WIPRO LTD WIPRO 600 500
110 YES BANK LIMITED YESBANK 2200 1000
111 ZEE ENTERTAINMENT ENT LTD ZEEL 1400 1000
Annexure-3
List of underlying in which market lot is being revised upwards:
S.No Underlying Symbol
Present
Market Lot
Revised
Market lot
1 ADANI ENTERPRISES LIMITED ADANIENT 400 500
2 APOLLO TYRES LTD APOLLOTYRE 3400 4000
3 AREVA T&D INDIA LIMITED AREVAT&D 750 1000
4 BAJAJ HINDUSTAN LTD BAJAJHIND 1425 2000
5 BALRAMPUR CHINI MILLS LTD BALRAMCHIN 2400 4000
6 BANK OF INDIA BANKINDIA 950 1000
7 BGR ENERGY SYSTEMS LTD BGRENERGY 400 500
8 BHARTI AIRTEL LIMITED BHARTIARTL 500 1000
9 BOSCH LIMITED BOSCHLTD 100 125
10 CHAMBAL FERTILIZERS LTD CHAMBLFERT 3450 4000
11 DISH TV INDIA LTD. DISHTV 5150 8000
12 DLF LIMITED DLF 800 1000
13 EDUCOMP SOLUTIONS LTD EDUCOMP 375 500
14 ESSAR OIL LTD ESSAROIL 1412 2000
15 FEDERAL BANK LTD FEDERALBNK 851 1000
16 FINANCIAL TECHNO (I) LTD FINANTECH 150 250
17 FORTIS HEALTHCARE LTD FORTIS 1300 2000
18 GMR INFRASTRUCTURE LTD. GMRINFRA 2500 4000
19 GODREJ INDUSTRIES LTD GODREJIND 1300 2000
20 GTL INFRA.LTD GTLINFRA 4850 8000
21 GVK POW. & INFRA LTD. GVKPIL 4750 8000
22 HOUSING DEV & INFRA LTD HDIL 774 1000
23 HINDUSTAN PETROLEUM CORP HINDPETRO 650 1000
24 HOTEL LEELA VENTURES LTD HOTELEELA 7500 8000
25 INDIABULLS REAL EST. LTD IBREALEST 1300 2000
26 ICSA (INDIA) LIMITED ICSA 1200 2000
27 IDEA CELLULAR LIMITED IDEA 2700 4000
28 THE INDIAN HOTELS CO. LTD INDHOTEL 3798 4000
29 THE INDIA CEMENTS LIMITED INDIACEM 1450 2000
30 INDIAN OVERSEAS BANK IOB 2950 4000
31 JAIPRAKASH ASSOCIATES LTD JPASSOCIAT 1688 2000
32 JAIPRAKASH POWER VEN. LTD JPPOWER 3125 4000
33 MARUTI SUZUKI INDIA LTD. MARUTI 200 250
34 MCLEOD RUSSEL INDIA LTD. MCLEODRUSS 900 1000
35 MOSER-BAER (I) LTD MOSERBAER 2475 4000
36 MAHANAGAR TELEPHONE NIGAM MTNL 3200 4000
37 MUNDRA PORT & SEZ LTD MUNDRAPORT 300 500
38 NAGARJUNA FERT & CHEM LTD NAGARFERT 5250 8000
39 NATIONAL ALUMINIUM CO LTD NATIONALUM 575 1000
40 NEYVELI LIGNITE CORPORATI NEYVELILIG 1475 2000
41 OIL AND NATURAL GAS CORP. ONGC 225 250
42 ONMOBILE GLOBAL LTD. ONMOBILE 550 1000
43 PANTALOON RETAIL (I) LTD PANTALOONR 850 1000
44 POWER GRID CORP. LTD. POWERGRID 1925 2000
45 PRAJ INDUSTRIES LTD PRAJIND 2200 4000
46 PUNJ LLOYD LIMITED PUNJLLOYD 1500 2000
47 RELIANCE COMMUNICATIONS L RCOM 700 2000
48 RELIANCE CAPITAL LTD RELCAPITAL 276 500
49 RELIANCE MEDIAWORKS LTD RELMEDIA 600 1000
50 REL. NAT. RESOURCES LTD. RNRL 3576 4000
51 ROLTA INDIA LTD ROLTA 1800 2000
52 SUZLON ENERGY LIMITED SUZLON 3000 4000
53 SYNDICATE BANK SYNDIBANK 3800 4000
54 TATA COMMUNICATIONS LTD TATACOMM 525 1000
55 TATA POWER CO LTD TATAPOWER 200 250
56 TV18 INDIA LIMITED TV-18 1825 4000
57 UNITED PHOSPHORUS LIMITED UNIPHOS 1400 2000
58 VIDEOCON INDUSTRIES LIMIT VIDEOIND 854 1000
59 VIJAYA BANK VIJAYABANK 6900 8000
Annexure-4
List of underlying in which market lot is unchanged:
S.No Underlying Symbol
Present
Market
Lot
1 CONTAINER CORP OF IND LTD CONCOR 250
2 EVEREST KANTO CYLINDERLTD EKC 2000
3 HINDUSTAN UNILEVER LTD. HINDUNILVR 1000
4 JAIN IRRIGATION SYSTEMS JISLJALEQS 250
5 UNITED SPIRITS LIMITED MCDOWELL-N 250
6 NAGARJUNA CONSTRN. CO. LT NAGARCONST 2000
7 RELIANCE POWER LTD. RPOWER 2000
 

iloo

New Member
#7
There is a history for keeping lot size at minimum of Rs. 2L.

There was a forward/Badla trading on BSE and ALBM on NSE. The lot size of underlying was considered as a lot size for such product. Hence the lotsize of forward/Badla/ALBM was 1 / 10 / 50 / 100 share, as the case may be.

After IT Bubble, it was observed that due to minimum lot size, many small investors were trading in such product and they lost heavily.

So just to keep small investors away from taking part on such risky instruments, minimum lot size of Rs. 2L was suggested and implemented.
It is precisely this large amount of capital outlay required, the smaller investors can't hedge their portfolio/stock. I agree with the other posters that the lot size should be smaller and standardised like in the US markets.If others were greedy that doesn't mean everyone has to be penalised.