F&O Watch: NSE Revises Quantity Freeze Limits For Index Derivatives Contracts

Capital markets stocks rallied on Monday, after the National Stock Exchange (NSE) announced a revision in the quantity freeze limits for index derivatives contracts, effective September 1. The update raises the permissible order size in certain contracts while keeping others unchanged.

BSE closed 4.2% higher, Motilal Oswal stock ended up 4.4%, while Angel One and CDSL stocks were up 2.76% and 3.5%, respectively, at Monday's close. NSDL shares climbed 3%.

According to the new framework, the freeze limits are set at 900 for Bank Nifty, 1,800 each for Nifty 50 and FINNIFTY, 2,800 for Nifty Midcap Select, and 600 for Nifty Next 50. This marks an increase for Bank Nifty contracts, which previously had a limit of 600, while the thresholds for the other indices remain the same.

What Are Freeze Limits?

These are the maximum permissible order sizes for a particular F & O contract. Quantity freeze limits prevent unusually large or erroneous trades, often referred to as“fat finger” errors, and safeguard market stability. By capping the maximum order size in futures and options contracts, the NSE aims to ensure smooth and efficient functioning of the derivatives market.

Last month, a punching error triggered extraordinary trading volumes in Clean Science & Technology. An error by Spark Avendus led to six crore shares changing hands, though the actual block size was 2.5 crore shares.

F & O Revisions

Recently, the NSE also announced plans to introduce pre-open trading in equity futures from December 8, 2025. The change follows the Securities and Exchange Board of India's (SEBI) directive to extend pre-open sessions to derivatives.

Beginning September 2, the NSE's expiry day for its futures and options contracts will shift from Thursday to Tuesday, marking a historic shift after 25 years.

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