The Bombay Stock Exchange (BSE) has changed the order input system in derivatives trades from today. The traders will now have to put the order in terms of multiplier units instead of in number of contracts. The new system is similar to that of National Stock Exchange.
For example, in the case of Sensex futures, the orders should be given as 50 Sensex instead of 1 Sensex contract for buying or selling the contract. Similarly, in the case of options, the orders should comprise number of underlying shares and not as number of contracts.
A BSE release said, the open positions of the members have been converted into multipliers / units with effect from August 20. It, however, added that the value of the portfolios of the members will remain unchanged.
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The new input system works this way. Suppose a member wants to buy 5 contracts of Sensex futures. Since the market lot of Sensex futures is 50, the order in this case should be given as (5*50) = 250.
Similarly, if a member wants to buy 10 option contracts, he should give the order as (10*100) = 1000 as the market lot for Sensex options is 100.
Further, in the case of individual stock options, if a member wants to buy 5 contracts of Reliance Industries, he is required give the order as (5*600) = 3000 as the market lot for Reliance Industries options is 600. The same logic will apply to other stocks as well.