Standardized lot size for derivative contracts on individual securities
Summary
SEBI mandates standardized lot sizes for derivative contracts on individual securities based on specific price bands. Stock Exchanges are required to review and revise these lot sizes every six months to ensure uniformity across exchanges. This circular supersedes previous regulations and derives its authority from the SEBI Act 1992 and SCRA 1956.
Text
Price Band (Rs.) Contract Size Lot Size (No. of units of underlying) Value (Rs. lakh) ≥1601 125 ≥2 801 - 1600 250 ≥2≤4 401 - 800 500 201 - 400 1,000 101 - 200 2,000 51 - 100 4,000 25 - 50 8,000 < 25 A multiple of 1000
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.
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 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.
The Stock Exchanges shall ensure that the lot size is same for an underlying traded across Exchanges.
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.
This Circular supersedes SEBI circular SEBI/DNPD/Cir-20/2004/02/23 dated February 23, 2004.
Source: SecMarx — Standardized lot size for derivative contracts on individual securities. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.