Under the futures and options (F&O) segment, six stocks were banned from trade on Tuesday, February 6, by the National Stock Exchange (NSE). The securities banned for the F&O trade are Hindustan Copper, India Cements, Indus Towers, National Aluminium Co, UPL Ltd and Zee Entertainment Enterprises Ltd (ZEEL).

Derivative contracts of these stocks were banned as the open market interest for these securities has crossed 95% of the market-wide position limit (MWPL) set by the exchanges. The MWPL is the maximum number of contracts that can be opened at any particular time. 

Hindustan Copper and ZEEL were retained on the list from Monday as the open interest as a percentage of the MWPL of their F&O contracts stood at 98.5% and 84.9%, respectively. Indus Towers and India Cements saw the open interest for their F&O contracts touch 121.9% and 105.1% of their respective MWPLs, respectively. 

All the above securities were retained on the list from Monday, February 5. National Aluminium and UPL were added to the list on Tuesday as the open interest of its F&O contracts reached 102.3% and 102.7%, respectively. 

The ban will be lifted once the position falls below 80%. Traders will get penalised for buying or selling these securities. They will be available for trading in the cash market. 

The open interest for the F&O contracts of SAIL declined below the 80% limit to 75.2%. Hence, it was exited from the list on Tuesday. 

The National Stock Exchange updates the list of securities on the F&O ban list daily. This list serves as a guide for traders and investors in the market. Traders who trade in indices do not encounter a situation of security ban.