The National Stock Exchange has added private sector lender RBL Bank to its F&O ban list on August 25, the monthly expiry date for the August derivatives contract, exceeding the 95% market position limit.

Shares of RBL Bank rose strongly on August 24 to close at a near five-month high of Rs 121.75, after rising 6% in the previous session.

The stock formed a strong bullish candlestick pattern on the daily bar chart with strong volume. Additionally, there was a morning star pattern, commonly known as a bullish reversal pattern, on both the previous day’s chart and the monthly chart.

Additionally, the stock has been trading above the Bollinger Bands for over a month and closed above the Bollinger Bands on Wednesday.

On Monday, the bank’s board approved raising Rs 3,000 crore through the issuance of debt securities. In addition, the board also approved the appointment of two new members – Gopal Jain, managing partner of Gaja Capital, and Sivakumar Gopalan, who has been researching for over 30 years.

If securities derivatives contracts exceed 95% of the overall market position limit, they will eventually be placed on the ban list, the NSE said.

During the ban, traders are not allowed to take new stock positions but can start reducing their holdings. F&O ban rules help reduce stock speculation.

The full market position limit set by the stock exchange is the maximum number of open positions (buys and offers) in F&O securities contracts. If a stock’s open interest exceeds 95% of the overall market position limit, its F&O contracts enter a lock-in period.

The NSE said that normal trading in securities would resume only after aggregate open interest across exchanges falls to 80% or below market-wide position limits.