NSE to implement one paisa tick size for stocks under ₹250: What it means

The National Stock Exchange (NSE) announced a significant change in its trading parameters from June 10. The NSE will put in place a one paisa tick size for all stocks priced below ₹250 per share with the aim to improve price discovery in the market, it said. A tick size represents the minimum price difference between two consecutive bids and offer prices.

Who will be affected by this change?

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The new tick size will apply to all securities, except ETFs, listed under the EQ, BE, BZ, BO, RL, and AF series.

Earlier, the tick size for these securities was five paise. Additionally, the NSE said that the tick size for securities under the T+1 settlement will also be applicable for T+0 settlement (series T0).

What NSE said on F&O segment?

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NSE also announced revisions in the Futures & Options (F&O) segment as tick size for stock futures will now be linked to the underlying price in the CM segment. NSE said that this change will be reviewed on a monthly basis by using the closing price on the last trading day of the month to determine the tick size for the next month.

Will this impact all stock future expiries?

Yes, this will apply to all stock futures expiries, including Near-Month, Middle-Month, and Far-Month contracts.

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The NSE circular also said, “Trading members may note that the applicable tick size for trading for securities will be available in the contract/spread master files" and there will be no change in the tick size of stock options due to any change in the tick size of the underlying security in the CM segment and its stock futures.