Education Series on Derivative Contracts
As mentioned earlier, futures on the
Sensex and Nifty are being traded in the standardised form, that
is, the market lot, minimum contract value etc are standardised. In the
case of Sensex Futures, the market lot is decided as 50 units of the
Sensex(one unit refers to the value of the index on the contract
day) and it is 200 units as far as Nifty futures are concerned. Trading
positions could be taken as multiple of these market lots.
The difference in the market lot as
stated above occurred because of the stipulation by SEBI that a
derivative contract should have a minimum value of Rs.2 lakhs for
each. When the two stock futures were introduced, the value of the
Sensex was a little over 4000 points and the Nifty was just above
1000.Hence,market lots as seen above were required to maintain a
minimum value of Rs.2 lakhs per contract.