NSE Reduces F&O Lot Sizes for Nifty 50 and Key Indices from October 28

With effect from October 28, 2025, the National Stock Exchange (NSE) has announced that lot sizes for futures and options (F&O) contracts on the Nifty 50 and four other major indices will be reduced. The change attempts to increase the affordability, standardisation, and accessibility of derivative contracts for a larger group of market players.

Revised Lot Sizes for Key Indices

Under the revised structure, the Nifty 50 lot size has been reduced from 75 to 65, while the Nifty Bank lot size has been trimmed from 35 to 30. Similarly, the Nifty Financial Services index lot size has fallen from 65 to 60, and the Nifty Mid Select index from 140 to 120. The lot size for the Nifty Next 50 index remains unchanged.

Transition Period and Expiry Dates

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Investors will be able to continue trading using the current lot sizes until the expiry of contracts on December 30, 2025. The last expiry for Nifty’s weekly and monthly contracts under the existing lot sizes is scheduled for December 23, 2025, whereas the monthly Nifty and Bank Nifty contracts will expire on December 30. NSE has urged its members to inform clients about these upcoming changes to ensure a smooth transition for all open positions and new trades.

The primary rationale behind reducing lot sizes is to keep the contract value within a manageable range. As derivatives are leveraged instruments, traders are required to pay only a margin rather than the full contract value. By lowering lot sizes, the NSE helps investors manage exposure and margin requirements more effectively while maintaining market efficiency and liquidity. This adjustment also seeks to standardise contracts, making them more practical and approachable for a broader spectrum of market participants, including retail traders.

Rationale Behind the Revision

By providing smaller, easier-to-manage holdings that appeal to both institutional and ordinary investors, the NSE's decision is anticipated to increase trading activity and participation in F&O contracts. According to experts, the modification may result in greater price discovery and market depth in derivatives trading.

Conclusion

The NSE's decision to reduce lot sizes is a big step in the direction of more efficient and inclusive derivatives trading. Investors can increase participation in the derivatives market and improve risk management by ensuring smaller, standardised contracts.