Revision in Tick Size for Stock Options Contracts in F&O Segment
Following the changes announced for Stock Futures contracts (NSE Circulars dated May 24, 2024, and March 13, 2025), the tick size has been revised to Stock Options contracts as well.
Effective Date: November 03, 2025
|
Underlying Security Price |
Current Tick Size |
Proposed Tick Size |
|
Below 250 |
0.05 |
0.01 |
|
≥250 |
0.05 |
0.05 (unchanged) |
Tick Size: What It Means for Your Trades
The tick size is the minimum price increment a security can move. Earlier for all stock options with underlying security price less than ₹250, the tick size was ₹0.05 (5 paise).
The Problem: Stock options often have wide bid-ask spreads, and when combined with the large lot sizes of lower-priced stocks, this small ₹0.05 tick results in high trading costs (impact cost) for participants.
The Solution: Reducing the tick size to ₹0.01 (1 paisa) for options on stocks priced below ₹250 will significantly tighten the bid-ask spreads.
Example:
- Consider a stock like WIPRO, trading around ₹242 with a lot size of 3000.
- With the old 5-paise tick, a typical spread of ₹2.55 – ₹2.60 costs ₹150 per lot.
- With the new 1-paise tick, the spread could narrow to ₹2.55 – ₹2.56, reducing the impact cost to only ₹30 per lot.
This change is crucial as it leads to better price discovery and lower impact costs for traders.
Please check the NSE Circular for further details.
