What is Minimum Contract value and Market lot?
As mentioned earlier, futures on the Sensex and Nifty are being traded in the standardized form, that is, the market lot, minimum contract value etc are standardized. 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 were required to maintain a minimum value of Rs.2 lakhs per contract. Contract value at any point of time is the value of the index at that time period multiplied by the market lot.
