Description
NSE revises strike interval for NIFTY 50 Long Term Index Options from 1000 to 1500, effective December 31, 2025, based on semi-annual review of illiquid strikes.
Summary
NSE has announced a revision in the strike scheme for NIFTY 50 Long Term Index Options following a semi-annual review. The strike interval will be increased from 1000 to 1500, while maintaining the same strike distribution of 5 in-the-money, 1 at-the-money, and 5 out-of-the-money strikes. This change is part of the periodic review mechanism for discontinuing illiquid strikes.
Key Points
- Strike interval for NIFTY 50 Long Term Index Options increased from 1000 to 1500
- Number of strikes remains unchanged at 5-1-5 (ITM-ATM-OTM)
- Change based on semi-annual review of illiquid strikes
- References original circular NSE/FAOP/67775 dated April 30, 2025
- Members must load updated contract files before trading on effective date
Regulatory Changes
Current Scheme:
- Strike Interval: 1000
- Strike Distribution: 5 ITM - 1 ATM - 5 OTM
Revised Scheme (Effective December 31, 2025):
- Strike Interval: 1500
- Strike Distribution: 5 ITM - 1 ATM - 5 OTM
This revision aligns with the periodic review mechanism established in Chapter 1.10 Strike scheme for modification and discontinuation of illiquid strikes in NIFTY 50 Long Term Index Options.
Compliance Requirements
For Trading Members:
- Load updated contract.gz file in trading application before December 31, 2025
- Load NSE_FO_contract_ddmmyyyy.csv.gz file before trading on effective date
- Access files from faoftp/faocommon directory on Extranet server
- Alternatively, access MII contract file from NSE website: https://www.nseindia.com/all-reports-derivatives
Important Dates
- Circular Date: December 16, 2025
- Effective Date: December 31, 2025
- Action Required By: December 30, 2025 (members must update systems before trading begins on effective date)
Impact Assessment
Market Impact: The wider strike interval (1500 vs 1000) will result in fewer total strike prices available for NIFTY long-term options, potentially concentrating liquidity in the available strikes. While the number of ITM, ATM, and OTM strikes remains constant at 5-1-5, the gaps between strikes will be 50% larger.
Operational Impact:
- Trading members must update contract files in their systems
- Existing positions in strikes outside the new scheme may require monitoring
- Reduced number of available strikes may affect hedging and arbitrage strategies
- Focus on discontinuing illiquid strikes should improve overall market quality
Trader Impact: Option traders using NIFTY long-term options will have fewer strike prices to choose from, but the strikes that remain should have better liquidity based on the semi-annual review process.
Impact Justification
Operational change affecting NIFTY long-term options trading with wider strike intervals, impacting liquidity distribution but maintaining same number of strikes