Increase in lot size of
F&O
The next month means
November expiry there would be increase in lot size of index and stock future
and option segment. For controlling the speculative trading of retail trader in
F&O segment, market regulator SEBI has issued some guidelines to increase
the lot size. The value of minimum derivative contract will increase to Rs 5
lakh. Earlier this limit was Rs 2 lakh.
Now the expert says
the volume of future contract may be shift towards option segment. In option
you have to pay only premium amount not the whole margin. So the expectation is
there may be 5% drop in turnover of future segment. Option contract have some
complex calculation for valuation so it is very difficult to participate the
retail trader in this segment. The other problem is liquidity, the stock option
is not much liquid. Only index options may witness the some increase in
turnover.
In the last one
month, the average daily turnover of option segment has been 1.5 lakh crore
whereas in future segment it was just only Rs 43,000 crore. Some future
contract lot size has increased up to 3 times. The lot size of nifty is 25 at
present which would be 75 from next November month. So the margin would be also
triple. Many stocks lot size got doubled so needed margin has also become
double. The participation of retail obviously would be come down.
Overall, now the
trading in derivative segment would be much costlier for retail trader.
If you have doubt about investment
product and want more information regarding investment or you need investment
services, feel free to ask us. We also conduct the seminar on investment and
financial planning. If you are interested for conducting seminar in your city,
just drop the mail.
Warm regards,
Arvind Trivedi
Certified Financial Planner
