Mini Contracts in Derivatives

Given the buoyancy in the stock markets for the last couple of years, SEBI has mentioned that they they would introduce a mini derivative contract with a minimum contract size of Rs 1 lakh at the time of introduction in the markets.

This means that retail traders and small time traders will be able to take derivative positions with smaller amounts of margins as the contract size decreases.

Today the contract size for most of the shares and index in the derivative segment is approximately anywhere between Rs 2 lakhs and above. With the margin requirement of atleast 20% in most cases, this will be a welcome move for small investors.

The contract will start on both the Sensex and the Nifty.

The risk containment and other measures applicable for existing exchange traded equity index derivatives contracts will be applicable to the mini derivative contracts.