The fixed number of shares or units that constitute one standard derivative contract on Indian exchanges.
Lot size is the minimum number of shares or units that must be traded in a single derivative contract. In India's futures and options market, you cannot buy or sell fractional lots — every trade must be in multiples of the lot size specified by the exchange.
The NSE determines lot sizes for each stock and index derivative to ensure that the contract value falls within a specified range. SEBI mandates that the minimum contract value should be approximately ₹5–10 lakh. As a stock's price changes, the NSE periodically revises the lot size. For example, Reliance Industries might have a lot size of 250 shares — at a price of ₹2,500, one lot has a notional value of ₹6,25,000.
Common lot sizes on the NSE include: Nifty 50 options/futures — 50 units (previously 75, reduced in April 2024), Bank Nifty — 15 units (previously 25), Reliance — 250 shares, TCS — 175 shares, and Infosys — 400 shares. These are updated periodically and published on the NSE website.
Lot size directly impacts the capital required for derivative trading. The Margin required for a Nifty futures position (lot size 50, Nifty at 22,000) on a notional value of ₹11,00,000 might be ₹1,10,000–1,50,000. For stock options, the premium per share multiplied by the lot size gives your total premium outflow. If a Reliance call option costs ₹30 per share with a lot size of 250, one lot costs ₹7,500.
Understanding lot size is essential for position sizing in derivatives. If your total trading capital is ₹5,00,000, a single Nifty futures position consuming ₹1,50,000 in margin represents 30% of your capital — already a concentrated bet. Professional traders typically risk no more than 2–5% of their capital on a single trade.
India Context
NSE sets lot sizes to maintain contract values of approximately ₹5–10 lakh. Lot sizes are revised periodically. Nifty lot size was reduced from 75 to 50 in April 2024.