One of the first things traders need to know is which stocks are available for future and options stocks trading and the lot size for each stock. This handy information helps traders choose the right stocks to trade based on their capital and risk appetite.
This blog post covers everything you need to know about F&O stock lists and what lot size means. Keep reading to expand your F&O trading knowledge!
What is Lot Size in NSE F&O Stocks?
Lot size is the minimum number of shares that you need to buy or sell to trade a single F&O contract. It represents the underlying quantity or asset amount per contract.
For example, take a popular future and options stocks like Reliance Industries (RIL). If the RIL futures lot size is 250, then each futures contract you buy or sell would represent 250 RIL shares. So, you cannot place an order for less than 250 shares of RIL futures in one go.
This lot size concept is critical because it impacts your profit or loss per contract and the margin money you need to trade.
When the lot size is smaller, you can trade in modest quantities even if you have limited capital. But for stocks with bigger lot sizes, the minimum shares you need to trade in are higher. So, the required margin money also goes up.
The bottom line — always check the lot size before selecting any stock for F&O trading. See if it fits your risk appetite and available trading funds. This small step goes a long way in managing trading risks efficiently.
Where to Find the Lot Sizes of F&O Stocks?
The National Stock Exchange (NSE) provides an Excel sheet with the list of all F&O stocks and their lot sizes on a monthly basis. You can download this NSE Excel sheet from the official NSE stock options to keep track of any changes in the NSE F&O stocks list or their lot sizes every month.
Here are some key highlights about the NSE F&O stock list:
1.It includes the list of top liquid stocks selected by NSE for F&O trading
2.The list is updated every six months based on the liquidity and volume of stocks
3.Only stocks that meet the minimum liquidity criteria laid down by SEBI are included
4.The exchange stipulates the lot size for each stock to standardize F&O trading
5.The number of F&O stocks in the list typically ranges from 30-50 at any point
The NSE F&O stocks belong to sectors like banking, IT, auto, oil & gas, infrastructure, metals, etc. By tracking this list, you can choose the top liquid stocks across market caps and sectors to trade futures & options contracts.
Use the F&O stock list excel sheet for:
1.Identifying stocks with high liquidity for lower volatility
2.Checking lot size to determine the required margin & trading quantity
3.Analysis of which stocks best fit your trading capital and risk profile
Revision in Futures and Options Lot Sizes for 37 Stocks
The National Stock Exchange (NSE) has announced an upward or downward revision in the lot sizes of futures and options (F&O) contracts on 37 stocks. These changes will be effective from the November 2023 expiry onwards as part of NSE's periodic review conducted every 6 months.
The key reason behind this revision is to ensure that the total value of each F&O contract remains within the range of Rs. 5 lakhs to Rs. 10 lakhs, as mandated by SEBI. Stocks that see a surge or decline in prices and breach this range are subject to lot size revisions.
Majority Get Downward Revision
Out of the 37 stocks, as many as 32 stocks will see a downward revision in their F&O lot sizes from November 2023 expiry and onwards. This means traders will now be able to trade a smaller number of shares for each contract.
For example, blue-chip stocks like Bajaj Auto, Mahindra & Mahindra, and Maruti Suzuki will now have a reduced lot size of 125, 350, and 50, respectively, versus 250, 700, and 100 previously.
Similarly, the new bank stock lot sizes from November are - Bank of Baroda (2925 compared to 5850 earlier), IDFC First Bank (7500 shares instead of 15000 shares per lot), and Punjab National Bank's lot size is lowered to 8000 from 16000 shares per lot.
This downward revision allows retail traders and investors with limited capital to trade the futures and options contracts of such large stocks. At the same time, it improves liquidity as more participants can trade these stocks at lower values per F&O contracts.
On the other hand, 5 stocks - MRF, Rec Ltd, GMR Infra, Glenmark Pharma, and Godrej Consumer saw an upward revision in their F&O lot sizes due to a surge in their share prices.
So make sure to take note of these important F&O lot size changes that come into effect for the November 2023 and subsequent monthly expiry series. Tracking lot size adjustments can help traders modify their positions in impacted stocks.
Conclusion
The National Stock Exchange reviews futures & options lot sizes every 6 months in line with SEBI regulations. The latest review has led to revised F&O lot sizes for 37 stocks to keep their contract values within the 5-10 lakhs range.
The key takeaway for traders is that 32 stocks now have smaller lot sizes, improving affordability and liquidity in their F&O contracts. However, one must also track the 5 stocks seeing an increase in their lot sizes due to significant share price rises.
