NSE Tick Size Update: The National Stock Exchange (NSE) has announced a significant change in tick size, set to take effect from April 15, 2025. The tick size, which represents the minimum price movement of a stock or index, will now follow revised rules in the Cash Market (CM), Stock Futures, and Index Futures segments. This adjustment aims to boost market liquidity and enhance the trading experience, particularly in high-priced stocks and indices.
What is Tick Size and Why Does It Matter?
Definition of Tick Size: Tick size refers to the smallest price increment a stock, index, or derivative (F&O) can move. For instance, if a stock has a tick size of ₹0.05, its price can fluctuate between ₹100 → ₹100.05 → ₹99.95, but not in smaller steps like ₹100.01 or ₹100.02.
Importance of Tick Size for Traders and Investors
- Profit and Loss Impact: A smaller tick size allows more precise price movements, benefiting short-term traders, while a larger tick size can reduce volatility.
- Liquidity Effect:
- Smaller tick size = More buyers and sellers, leading to higher liquidity.
- Larger tick size = Requires bigger price movements, potentially reducing liquidity.
- Influence on Trading Strategies:
- Intraday traders prefer smaller tick sizes for quicker entries and exits.
- Long-term investors benefit from more stable stocks with larger tick sizes.
- Effect on Speculation: Larger tick sizes may curb excessive speculation, making markets more structured.
Changes in NSE Tick Size Rules (Effective April 15, 2025)
NSE’s revised tick size framework will introduce significant modifications to stock and index price movements. (NSE Circular CM Segment PDF)
1. Cash Market & Stock Futures Segment
- Example: Previously, a stock priced at ₹6,000 moved in ₹0.05 increments (₹6,000 → ₹6,000.05 → ₹6,000.10).
- New Rule: The same stock will now move in ₹0.50 increments (₹6,000 → ₹6,000.50 → ₹6,001.00).
| Share price (₹) | Old Tick Size (₹) | New Tick Size(₹) |
| below 250 | 0.01 | 0.01(no change) |
| 250 – 1,000 | 0.05 | 0.05 (no change) |
| 1,000–5,000 | 0.05 | 0.10 |
| 5,000–10,000 | 0.05 | 0.50 |
| 10,000–20,000 | 0.05 | 1.00 |
| above 20,000 | 0.05 | 5.00 |
2. Index Futures Segment
Download PDF from Here – (Revision in tick size of Index Futures in F&O Segment)
- Example: Earlier, the Nifty 50 index moved in ₹0.05 increments (30,500.05 → 30,500.10).
- New Rule: Now, it will move in ₹0.20 increments (30,500.00 → 30,500.20 → 30,500.40).
| value of index | Old Tick Size (₹) | New Tick Size(₹) |
| up to 15,000 | 0.05 | 0.05 (no change) |
| 15,000 – 30,000 | 0.05 | 0.10 |
| above 30,000 | 0.05 | 0.20 |
Why Has NSE Made This Change?
According to NSE, the revised tick size structure aims to:
- Enhance market liquidity by optimizing price discovery.
- Improve trade execution and minimize unnecessary fluctuations.
- Align with global market standards to foster efficient trading environments.
What Should Traders and Investors Do?
- Intraday Traders: Adjust trading strategies to accommodate the revised tick size movement.
- Long-Term Investors: Expect increased price stability in select stocks.
- Options Traders: Be aware of changes in premium movement, as tick size adjustments will influence option pricing.
Also Read : Best Debt Free Stocks in India in 2025
Final Thoughts
Tick size, though a small aspect of market structure, plays a crucial role in liquidity, volatility, and trading efficiency. With NSE’s latest revision, traders and investors must reassess their strategies to stay ahead of market movements.Stay updated with the latest market trends and trading strategies to make the most of the new tick size rules set to go live on April 15, 2025.
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Hasan is the founder of HalalFinance.co.in, created after personally struggling to find reliable answers about halal investing in stocks. With a finance background and a passion for helping the Muslim community, He now shares well-researched, transparent, and authentic content to empower Muslims on their path to halal wealth-building.