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SEBI Lot Size Changes; Here’s How It Will Impact uTrade Originals

April 26, 2024
Reading Time: 4 minutes

In the world of algo trading, everything is dynamic. Traders need to be on their toes when it comes to trading algos. Be it fluctuations in the indices or changes in regulations laid down for trading, each has a significant impact on algo traders and their portfolios. And, a recent change in regulation by SEBI has left traders scratching their heads. But, we’re here to help you decode the same. 

In the world of algo trading, everything is dynamic. Traders need to be on their toes when it comes to trading algos. Be it fluctuations in the indices or changes in regulations laid down for trading, each has a significant impact on algo traders and their portfolios. And, a recent change in regulation by SEBI has left traders scratching their heads. But, we’re here to help you decode the same. 

As you know, the Securities and Exchange Board of India (SEBI) regulates the markets in India and updates certain aspects related to trading from time to time. A recent update from SEBI regarding lot sizes for Nifty has had some impact on the strategies under uTrade Originals. 

Here, we’ll discuss significant points about SEBI’s change in lot size on portfolios and uTrade Originals strategies. Read on!

SEBI Lot Size Adjustments: What Has Changed?

A lot is the number of units of a financial instrument that’s traded on an exchange. In this case, the instruments impacted are futures and options. SEBI has reduced the lot size of these for Nifty. 

Effective April 26th, 2024, the lot size for Nifty will be reduced from 50 to 25.

This has resulted in a positive impact for traders who rely on uTrade Originals for their algo trading journey. But, what exactly is uTrade Originals? Let’s discuss these and also understand the impact of SEBI’s lot size changes on them. 

uTrade Originals: Trade like a Pro

To trade in Options, traders must have their strategy in place. But, what if we tell you that you can easily get access to expert-crafted strategies by industry veterans, offering invaluable market insights? Sounds exciting, right? That is exactly why we, at uTrade Algos, brought forth uTrade Originals. 

uTrade Originals helps you trade like a PRO on uTrade Algos with the help of strategies by industry experts. With a single click, you can select the uTrade Originals that aligns with your goals and objectives and you’re good to go. The powerful algorithms will then take the reins, executing trades on your behalf and helping you trade like a PRO. 

Among our list of uTrade Originals, the ones mentioned below are live: 

  • Shaant Bazaar Ka Raja aka Auto Straddle intraday selling strategy
  • Dual Nifty aka DN for for Wednesday and Thursday Nifty trading sessions
  • Chakravyuh Ka Tod Nifty aka Open Interest-Based Strategy focusing on Bank Nifty weekly options
  • Turtle Trader combines three strategies within one portfolio

Why Pick uTrade Originals? 

1. Strategies for every market

On uTrade Algos, you get access to expert-crafted strategies for every type of market. Be it bearish, bullish or volatile, our expert strategies on uTrade Originals help you navigate through the ups and downs smoothly. 

2. Offers diversification

Every algo trader has his own goals and targets. uTrade Originals offers a diverse range of algorithms to cater to your specific needs as a trader.

3. Save time

Often to create a strategy, traders need to spend days analysing the markets. But, with uTrade Originals, just with one click, traders get access to strategies curated by experts from the industry. They just need to subscribe to the uTrade Originals strategy and voila, they’re good to go. Our algos take over and leave you with time to focus on other trading-related aspects. 

Now that we’ve explained what uTrade Originals are, let’s understand the impact of the changes in lot size on them in the following section. 

Impact of SEBI’s Change on uTrade Originals

Before you sweat about your portfolios, let us explain how the SEBI lot size change has impacted our uTrade Originals. The following automated options strategies will require adjustments:

  • Shaant Bazaar Ka Raja
  • Dual Nifty
  • Chakravyuh Ka Tod Nifty
  • Turtle Trader

Changes to Turtle Trader Strategy

The Turtle Trader strategy, which combines three strategies within one portfolio, requires a specific adjustment. Only the Nifty strategy within Turtle Trader will be modified. This involves doubling the traded lots for both call and put options while maintaining existing exit parameters and margin requirements.

Adjustment to be made only for Nifty strategy: Turtle Trader

Existing traded no. of lot = 1 lot each (CE/PE)

Revised traded no. of lots = 2 lots each (CE/PE)

The following table will clearly show the changes in margin blocking per multiplier and exit parameter values. 

NEW PARAMETERS AFTER LOT SIZE ADJUSTMENTS (W.E.F 26th APRIL 2024)
S.NOSTRATEGYCURRENT MARGINCURRENT EXIT PARAMETERSNEW MARGINNEW EXIT PARAMETERS
SLTPSLTP
1Shaant Bazaar Ka Raja165,0002,000NA80,0001,000NA
2Chakravyuh Ka Tod Nifty165,0001,2001,20080,000600600
3Turtle Trader*4,00,000BNF1-900,BNF2-450,NF-1,100/PF-3,900NA4,00,000BNF1-900,BNF2-450,NF-1,100/PF-3,900
4Dual Nifty165,0002,400NA80,0001,200NA

 

This means that the change in the lot sizes has brought about good news for traders. Now you can trade with a minimum investment of Rs 80,000. This is the minimum amount needed if your strategy chosen is Dual Nifty, Chakravyuh Ka Tod Nifty and Shaant Bazaar Ka Raja. 

Also, according to the change, the parameters of Stop Loss and Target Profit have changed for the uTrade Originals Strategies for Nifty. For Shaant Bazaar Ka Raja, the stop loss has gone down Rs 2000 to 1000. Similarly, for Chakravyuh Ka Tod Nifty, both the stop loss and target profit have gone down to Rs 600 from Rs 1200. Similar changes can be seen clearly in the table above for Turtle Trader and Dual Nifty. 

Conclusion

At uTrade Algos, we are constantly optimising our uTrade Originals strategies to ensure they remain effective in a dynamic market environment. That being said, we are committed to keeping you informed about any changes that might affect your algo trading experience. 

Frequently Asked Questions

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uTrade Algo’s proprietary features—advanced strategy form, one of the fastest algorithmic trading backtesting engines, and pre-made strategies—help you level up your derivatives trading experience

The dashboard is a summarised view of how well your portfolios are doing, with fields such as Total P&L, Margin Available, Actively Traded Underlyings, Portfolio Name, and Respective Underlyings, etc. Use it to quickly gauge your algo trading strategy performance.

You can sign up with uTrade Algos and start using our algo trading software instantly. Please make sure to connect your Share India trading account with us as it’s essential for you to be able to trade in the live markets. Watch our explainer series to get started with your account.

While algo trading has been in use for decades now for a variety of purposes, its presence has been mainly limited to big institutions. With uTrade Algos you get institutional grade features at a marginal cost so that everyone can experience the power of algos and trade like a pro.

On uTrade Algos, beginners can start by subscribing to pre-built algos by industry experts, called uTrade Originals. The more advanced traders can create their own algo-enabled portfolios, with our no-code and easy-to-use order form, equipped with tons of features such as robust risk management, pre-made algorithmic trading strategy templates, payoff graphs, options chain, and a lot more.

From single-leg strategies to complex portfolios, with upto five strategies, each strategy having up to six legs, uTrade Algos gives one enough freedom to create almost any auto trading strategy one likes. What’s more, is that there are pre-built algos by industry experts for complete beginners and pre-made strategy templates for those who want to try their hand at strategy creation.

An interesting feature that uTrade Algos is bringing to the table is a set of pre-built algorithms curated by top-ranking industry experts who have seen the financial markets inside out. These algorithms, called uTrade Originals, will be available for subscribers on the platform.

Algos have the capability to fire orders to the exchange in milliseconds, a speed which is impossible in manual trading. That is why traders leverage the power of algo trading to make their efforts more streamlined and efficient. You can try uTrade Algos for free for 7 days!

Claim your 7-day free trial!

Experience uTrade Algos on the web and mobile app without any commitment.

Knowledge Centre & Stories of Success

Algorithmic trading, on platforms like uTrade Algos, has enabled traders to execute complex strategies with speed, accuracy, and efficiency. Among the plethora of tools and indicators available to algorithmic traders, the Relative Strength Index (RSI) stands out as one of the most essential and versatile indicators. In this blog, we will delve into the importance of the RSI indicator for algorithmic trading programs and provide a comprehensive guide on how to effectively use it for successful algo trading.

The Relative Strength Index (RSI) is a popular momentum oscillator that has gained widespread recognition among traders and investors alike. It is a versatile technical indicator that measures the speed and change of price movements, helping traders identify overbought or oversold conditions in the market. In the realm of algorithmic trading, on platforms like uTrade Algos, the RSI indicator has emerged as a must-have tool for several compelling reasons. In this blog post, we will explore the key features and benefits of integrating the RSI indicator into algorithmic trading programs.

In the dynamic world of derivatives trading, margin requirements play a crucial role in determining the capital needed to initiate and maintain positions. One of the most widely used margin systems globally is the Standard Portfolio Analysis of Risk (SPAN) margin. This blog aims to provide a comprehensive understanding of SPAN margin, its calculation methodology, significance, and implications for traders and investors.

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