New margins on NSE (National Stock Exchange) are effective from the contracts of November Series. Although these were available for trading since two months most people do not trade them as they are not current month. But with expiry of october contracts tomorrow (29 Oct 2015), november contracts become first month and investors and traders in f&0 segment has to trade them. As written in my earlier article on 5 lakh minimum lot size f&0 list there is a huge increase in required margins to trade in these contracts.
New margins are not due to change in calculation method of SPAN or additional margins but due to the change in lot sizes which is major one this time. Changes in lot sizes are common earlier too but this time its huge because of SEBI’s requirement of making minimum lot value in derivatives contracts as 5 lakh rupees. The minimum lot value earlier was 2 lakh rupees only. This new regulation by SEBI regarding the minimum value of derivative lot increased required margins in most of the contracts that are traded in NSE.
You can find the daily margin requirements to trade in nse fno segment with initial margin and additional margin details.
Below is the table in which I compared most of the contracts traded in f&0 segment of nse with old lot margin requirement vs new lot values margin requirement. Please note that I refer old lot as derivatives contracts with minimum 2 lakh value and new contracts as f&o contracts with minimum 5 lakh value.
These are sorted with highest % increase in margins in rupees. As can be seen the maximum increase in margins is in ADANIENT with more than 1000% increase in margin requirement. As of now for october contract margin required is just Rs 8530 where as from november contract it is 103000. The lot size of it is increased from earlier 500 to 6000 followed by unitech with 500% margin increase.
But the increase is not for all stocks. For example there is a huge decrease in margin requirement for MRF for which earlier it was around 6.5 lakh rupees which decreased to around 78000 rupees. Before this SEBI’s new regulation of minimum 5 lakh value for all f&0 contracts, the minimum allowed lot size for stock futures and options was 125. New lot size of MRF is just 15 against earlier 125.
These new margins may effect the trading pattern and rollovers. It has to be seen how the liquidity will be effected with the change. For retail investors trading in options in some of the contracts will require huge amounts. For example to buy 1 option contract in unitech even with 1 rupee premium requires 77,000 rupees. Assuming the trading value remains constant there will be effect on liquidity and some small investors may find it difficult to trade with huge increase in margins in most of their stocks.
In Indices, now the margins of both Nifty and Bank Nifty are similar compared to earlier gap in margin requirement. This may see some traders shifting to bank nifty from nifty contracts. Actual pattern in trading change, if any, can be noticed with in a week of rollover of next series.
New Margins On NSE From November Contracts and Existing Margins Comparision
| Contract | Old Lot | Old Margin | New Lot | New Margin | Change Rs |
| ADANIENT | 500 | 8530 | 6000 | 103001 | 94471 |
| UNITECH | 11000 | 17841 | 77000 | 125973 | 108132 |
| JPASSOCIAT | 8000 | 22365 | 48000 | 135006 | 112641 |
| ADANIPOWER | 4000 | 21210 | 20000 | 106800 | 85590 |
| SUNTV | 500 | 28110 | 2000 | 113189 | 85079 |
| JINDALSTEL | 2000 | 25710 | 7000 | 90598 | 64888 |
| GMRINFRA | 13000 | 24213 | 39000 | 73223 | 49010 |
| NIFTY | 25 | 16347 | 75 | 49421 | 33074 |
| ALBK | 2000 | 18945 | 6000 | 57255 | 38310 |
| JSWENERGY | 2000 | 31200 | 6000 | 94275 | 63075 |
| CAIRN | 1000 | 21290 | 3000 | 64320 | 43030 |
| RELCAPITAL | 500 | 27228 | 1500 | 82238 | 55010 |
| ORIENTBANK | 1000 | 18540 | 3000 | 55995 | 37455 |
| RPOWER | 4000 | 26240 | 12000 | 79230 | 52990 |
| WOCKPHARMA | 125 | 31823 | 375 | 96063 | 64240 |
| ACC | 125 | 21874 | 375 | 66015 | 44141 |
| HDIL | 2000 | 27169 | 6000 | 81987 | 54818 |
| TATAMOTORS | 500 | 28768 | 1500 | 86790 | 58022 |
| BANKINDIA | 1000 | 17320 | 3000 | 52245 | 34925 |
| KSCL | 250 | 20646 | 750 | 61919 | 41273 |
| YESBANK | 250 | 22988 | 700 | 64806 | 41818 |
| RELINFRA | 500 | 24633 | 1300 | 64474 | 39841 |
| SYNDIBANK | 2000 | 26325 | 5000 | 66275 | 39950 |
| IFCI | 8000 | 46580 | 20000 | 117250 | 70670 |
| HINDALCO | 2000 | 25655 | 5000 | 64575 | 38920 |
| DLF | 2000 | 40789 | 5000 | 102472 | 61683 |
| UCOBANK | 4000 | 28600 | 10000 | 71750 | 43150 |
| NHPC | 11000 | 25273 | 27000 | 62505 | 37232 |
| NMDC | 2000 | 25625 | 5000 | 63163 | 37538 |
| SOUTHBANK | 9000 | 24728 | 22000 | 60830 | 36102 |
| JSWSTEEL | 250 | 28490 | 600 | 68847 | 40357 |
| SUNPHARMA | 250 | 28197 | 600 | 68135 | 39938 |
| ASIANPAINT | 250 | 25906 | 600 | 62597 | 36691 |
| DIVISLAB | 250 | 34701 | 600 | 83846 | 49145 |
| LUPIN | 125 | 29919 | 300 | 72290 | 42371 |
| HCLTECH | 250 | 30400 | 600 | 73448 | 43048 |
| LT | 125 | 23353 | 300 | 56419 | 33066 |
| HINDUNILVR | 250 | 25575 | 600 | 61782 | 36207 |
| INDUSINDBK | 250 | 28992 | 600 | 70019 | 41027 |
| AMARAJABAT | 250 | 31899 | 600 | 77010 | 45111 |
| SRTRANSFIN | 250 | 29473 | 600 | 71127 | 41654 |
| OIL | 500 | 24959 | 1200 | 60120 | 35161 |
| IBREALEST | 4000 | 52635 | 9000 | 119289 | 66654 |
| SAIL | 4000 | 30500 | 9000 | 68603 | 38103 |
| IGL | 500 | 30813 | 1100 | 68310 | 37497 |
| ENGINERSIN | 1000 | 25163 | 2200 | 55776 | 30613 |
| TATACOMM | 500 | 26726 | 1100 | 59221 | 32495 |
| TATACHEM | 500 | 26088 | 1100 | 57797 | 31709 |
| LICHSGFIN | 500 | 30828 | 1100 | 68294 | 37466 |
| BIOCON | 500 | 28246 | 1100 | 62574 | 34328 |
| CASTROLIND | 500 | 28824 | 1100 | 63852 | 35028 |
| MCLEODRUSS | 1000 | 24235 | 2200 | 53614 | 29379 |
| DHFL | 1000 | 28983 | 2200 | 63938 | 34955 |
| AMBUJACEM | 1000 | 26120 | 2100 | 55230 | 29110 |
| TATAMTRDVR | 1000 | 38928 | 2100 | 82278 | 43350 |
| IRB | 1000 | 38465 | 2100 | 81265 | 42800 |
| JISLJALEQS | 4000 | 35850 | 8000 | 72280 | 36430 |
| NFTYMCAP50 | 75 | 20215 | 150 | 40749 | 20534 |
| KTKBANK | 2000 | 31325 | 4000 | 63130 | 31805 |
| TATAGLOBAL | 2000 | 33965 | 4000 | 68440 | 34475 |
| IDBI | 4000 | 58030 | 8000 | 116920 | 58890 |
| HDFCBANK | 250 | 34797 | 500 | 70109 | 35312 |
| FEDERALBNK | 4000 | 36870 | 8000 | 74280 | 37410 |
| PIDILITIND | 500 | 35311 | 1000 | 71133 | 35822 |
| RECLTD | 1000 | 34975 | 2000 | 70450 | 35475 |
| RELIANCE | 250 | 29327 | 500 | 59070 | 29743 |
| L&TFH | 4000 | 33940 | 8000 | 68360 | 34420 |
| PFC | 1000 | 34848 | 2000 | 70185 | 35337 |
| TECHM | 500 | 34313 | 1000 | 69103 | 34790 |
| CESC | 500 | 37731 | 1000 | 75985 | 38254 |
| ABIRLANUVO | 125 | 33691 | 250 | 67849 | 34158 |
| NTPC | 2000 | 32560 | 4000 | 65570 | 33010 |
| INFY | 250 | 36006 | 500 | 72503 | 36497 |
| PTC | 4000 | 34070 | 8000 | 68600 | 34530 |
| WIPRO | 500 | 36158 | 1000 | 72803 | 36645 |
| CANBK | 1000 | 36425 | 2000 | 73340 | 36915 |
| GLENMARK | 250 | 30916 | 500 | 62243 | 31327 |
| ANDHRABANK | 4000 | 33220 | 8000 | 66880 | 33660 |
| AXISBANK | 500 | 34398 | 1000 | 69250 | 34852 |
| UPL | 500 | 32378 | 1000 | 65183 | 32805 |
| TATAPOWER | 4000 | 35150 | 8000 | 70760 | 35610 |
| SKSMICRO | 500 | 36069 | 1000 | 72603 | 36534 |
| MOTHERSUMI | 750 | 27692 | 1500 | 55740 | 28048 |
| BHARATFORG | 250 | 30593 | 500 | 61563 | 30970 |
| UBL | 250 | 29915 | 500 | 60189 | 30274 |
| POWERGRID | 2000 | 32895 | 4000 | 66180 | 33285 |
| SBIN | 1000 | 30438 | 2000 | 61235 | 30797 |
| TATASTEEL | 1000 | 36460 | 2000 | 73345 | 36885 |
| HAVELLS | 1000 | 32128 | 2000 | 64630 | 32502 |
| PNB | 2000 | 32880 | 4000 | 66140 | 33260 |
| BHEL | 1000 | 26640 | 2000 | 53575 | 26935 |
| HEXAWARE | 1000 | 32343 | 2000 | 65025 | 32682 |
| DABUR | 1000 | 33995 | 2000 | 68345 | 34350 |
| RCOM | 4000 | 48593 | 8000 | 97686 | 49093 |
| COLPAL | 250 | 30702 | 500 | 61586 | 30884 |
| TVSMOTOR | 1000 | 46553 | 2000 | 93355 | 46802 |
| M&MFIN | 1000 | 28135 | 2000 | 56320 | 28185 |
| BATAINDIA | 500 | 32978 | 1000 | 65973 | 32995 |
| ONGC | 1000 | 31983 | 2000 | 63980 | 31997 |
| VEDL | 2000 | 39715 | 4000 | 79240 | 39525 |
| JUSTDIAL | 250 | 35230 | 500 | 70035 | 34805 |
| BANKBARODA | 2000 | 42655 | 125 | 82127 | 39472 |
| CNXPSE | 75 | 19747 | 150 | 37794 | 18047 |
| CNXIT | 25 | 23244 | 45 | 42160 | 18916 |
| ASHOKLEY | 4000 | 45850 | 7000 | 80780 | 34930 |
| IOB | 8000 | 35740 | 14000 | 62790 | 27050 |
| ICICIBANK | 1000 | 33998 | 1700 | 58195 | 24197 |
| ARVIND | 1000 | 35858 | 1700 | 61345 | 25487 |
| EXIDEIND | 2000 | 40555 | 3400 | 68918 | 28363 |
| IDFC | 2000 | 16545 | 3300 | 27489 | 10944 |
| SRF | 250 | 45274 | 400 | 73021 | 27747 |
| ADANIPORTS | 1000 | 37658 | 1600 | 60696 | 23038 |
| MINDTREE | 250 | 47925 | 400 | 77236 | 29311 |
| HINDZINC | 2000 | 42975 | 3200 | 69256 | 26281 |
| AJANTPHARM | 250 | 48710 | 400 | 78495 | 29785 |
| BRITANNIA | 125 | 49919 | 200 | 80436 | 30517 |
| M&M | 250 | 38378 | 400 | 61837 | 23459 |
| HEROMOTOCO | 125 | 41044 | 200 | 66129 | 25085 |
| APOLLOHOSP | 250 | 42125 | 400 | 67870 | 25745 |
| TCS | 125 | 39528 | 200 | 63683 | 24155 |
| HDFC | 250 | 39619 | 400 | 63828 | 24209 |
| CIPLA | 500 | 43570 | 800 | 70182 | 26612 |
| ULTRACEMCO | 125 | 45234 | 200 | 72862 | 27628 |
| CENTURYTEX | 500 | 38003 | 800 | 61210 | 23207 |
| ITC | 1000 | 44475 | 1600 | 71632 | 27157 |
| SIEMENS | 250 | 42534 | 400 | 68504 | 25970 |
| STAR | 250 | 40795 | 400 | 65688 | 24893 |
| BAJAJ-AUTO | 125 | 40237 | 200 | 64777 | 24540 |
| IBULHSGFIN | 500 | 46313 | 800 | 74260 | 27947 |
| VOLTAS | 1000 | 37050 | 1600 | 59232 | 22182 |
| INDIACEM | 4000 | 46876 | 6000 | 70812 | 23936 |
| APOLLOTYRE | 2000 | 49295 | 3000 | 74430 | 25135 |
| UNIONBANK | 2000 | 45805 | 3000 | 69090 | 23285 |
| IDEA | 2000 | 38745 | 3000 | 58403 | 19658 |
| CROMPGREAV | 2000 | 46715 | 3000 | 70388 | 23673 |
| TITAN | 1000 | 43820 | 1500 | 66008 | 22188 |
| PETRONET | 2000 | 48560 | 3000 | 73073 | 24513 |
| FTSE100 | 50 | 25440 | 75 | 38160 | 12720 |
| CNXINFRA | 100 | 24622 | 150 | 35656 | 11034 |
| AUROPHARMA | 500 | 53319 | 700 | 75205 | 21886 |
| KOTAKBANK | 500 | 42074 | 700 | 59294 | 17220 |
| CEATLTD | 500 | 76246 | 700 | 107338 | 31092 |
| GAIL | 1000 | 39813 | 1400 | 55990 | 16177 |
| ZEEL | 1000 | 53585 | 1300 | 70106 | 16521 |
| GODREJIND | 1000 | 48130 | 1300 | 62615 | 14485 |
| DISHTV | 4000 | 54620 | 5000 | 68763 | 14143 |
| BANKNIFTY | 25 | 34831 | 30 | 42123 | 7292 |
| JUBLFOOD | 250 | 47417 | 300 | 57302 | 9885 |
| HINDPETRO | 500 | 48063 | 600 | 58074 | 10011 |
| IOC | 1000 | 49968 | 1200 | 60375 | 10407 |
| OFSS | 125 | 61852 | 150 | 74732 | 12880 |
| BPCL | 500 | 56834 | 600 | 68666 | 11832 |
| DRREDDY | 125 | 64283 | 150 | 77648 | 13365 |
| BHARTIARTL | 1000 | 44793 | 1200 | 54102 | 9309 |
| GRASIM | 125 | 57800 | 150 | 69801 | 12001 |
| COALINDIA | 1000 | 41323 | 1200 | 49875 | 8552 |
| BEL | 375 | 56761 | 450 | 68297 | 11536 |
| DJIA | 25 | 35231 | 30 | 42277 | 7046 |
| MARUTI | 125 | 70363 | 125 | 70843 | 480 |
| BAJFINANCE | 125 | 81573 | 3100 | 66542 | -15031 |
| PAGEIND | 125 | 220455 | 50 | 88501 | -131954 |
| EICHERMOT | 125 | 272157 | 25 | 54809 | -217348 |
| BOSCHLTD | 125 | 331059 | 25 | 66635 | -264424 |
| MRF | 125 | 646980 | 15 | 78078 | -568902 |