The National Stock Exchange (NSE) has revised the quantity freeze limits for index derivatives contracts, with the new framework coming into effect from September 1, 2025. The move, announced via a circular on August 29, is aimed at enhancing safeguards in the derivatives market.
Revised freeze limits for index contracts
According to the updated circular, the applicable quantity freeze limits will be:
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Bank Nifty: 900
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Nifty 50: 1,800
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Finnifty: 1,800
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Nifty Midcap Select: 2,800
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Nifty Next 50: 600
This represents a change from the earlier framework effective July 1, 2025, when the limit for Bank Nifty stood at 600 contracts. The new revision increases the permissible order size for Bank Nifty futures and options, while keeping the freeze limits for other index contracts unchanged.
Purpose of quantity freeze limits
Quantity freeze limits are designed to act as a safeguard, preventing erroneous or unusually large trades that could destabilize the market. By capping the maximum order size in futures and options contracts, the exchange reduces the risk of so-called “fat finger” trades, which occur when traders accidentally place oversized orders.
Implementation for trading members
The NSE has advised all trading members to update their systems with the revised contract details before the effective date. Updated contract files have been made available on the exchange’s extranet server and official website.
The revised freeze limits will apply to all trades in index derivatives from September 1, ensuring that order management aligns with the new regulatory framework.
The adjustment in freeze limits highlights the NSE’s focus on maintaining market stability while providing flexibility to traders, particularly in heavily traded indices such as Bank Nifty.
