Mumbai: A major change is coming to index derivatives from September 1, 2025, as the National Stock Exchange (NSE) has revised the quantity freeze limits for index derivative contracts. The update was announced through a circular issued on August 29.
Revised freeze limits for major indices
As per the new framework, the freeze limits will now be as follows: Bank Nifty at 900, Nifty 50 at 1,800, FinNifty at 1,800, Nifty Midcap Select at 2,800, and Nifty Next 50 at 600. Earlier, under the July 1 framework, Bank Nifty was capped at 600 while the others had the same limits as they continue to hold now.
Impact on Bank Nifty traders
This revision effectively increases the permissible order size for Bank Nifty futures and options, while leaving the freeze limits for other contracts unchanged.
Purpose of freeze limits
Quantity freeze limits act as a safety measure to prevent wrong or unusually large orders that may disturb market stability. By capping maximum order size, the exchange reduces the risk of 'fat finger' trades and ensures smooth functioning of the derivatives market.
Instructions for trading members
The NSE has advised trading members to update their systems with the revised contract details before the effective date. The updated contract files are available for download on the exchange’s extranet server and official website.
Effect on traders
These new limits will directly impact large traders in the futures and options segment, as they may need to adjust their trading quantities. While the change is not very big, it may take a day or two for traders to get comfortable with order execution under the revised freeze limits.
