The Nationwide Inventory Trade (NSE) has revised tick sizes for shares, indices and their respective futures and choices (F&O) contracts. Based mostly on the closing value of shares on March 28, the adjustments come into impact from Tuesday.
What’s tick measurement?
Tick measurement refers back to the minimal prime motion by which the value of a safety, index, or spinoff can change if the inventory market goes up or down. A smaller tick measurement implies that the liquidity and the value effectivity of a inventory might be enhanced, whereas a bigger tick measurement means much less volatility and speculative buying and selling.
For instance, if a inventory has a tick measurement of Rs 0.05, then the value can solely go up from Rs 100.00 to Rs 100.05, and never Rs 100.02.
Revised tick measurement as per NSE
- Shares priced beneath Rs 250 – Tick measurement Rs 0.o1
- Shares priced between Rs 251 and Rs 1,000 – Tick measurement Rs 0.05
- Shares priced between Rs 1,001 and Rs 5,000 – Tick measurement revised from Rs 0.05 to Rs 0.10
- Shares priced between Rs 5,001 and Rs 10,000 – Tick measurement revised from Rs 0.05 to Rs 0.50
- Shares priced between Rs 10,001 and Rs 20,000 – Tick measurement revised from Rs 0.05 to Rs 1.00
- Shares priced above Rs 20,001 – Tick measurement revised from Rs 0.05 to Rs 5.00
The modifications made within the tick measurement as per NSE will apply to each the money market (CM) and the inventory derivatives (F&O) phase. The revisions in tick measurement will have an effect on value discovery, resulting in much less value fluctuations and improved pattern qualities.
Additional, larger tick sizes for sure shares will result in extra significant value strikes, inflicting higher rewards for buyers.
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