Under the futures and options (F&O) segment, five stocks were banned from trade on Tuesday, 18 March, by the National Stock Exchange (NSE). The securities banned for the F&O trade are BSE Limited, Manappuram Finance, Hindustan Copper, IndusInd Bank, and Steel Authority of India.
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.
BSE Ltd, Manappuram Finance, and Hindustan Copper were retained on the list from Monday as the open interest as a percentage of the MWPL of its F&O contracts stood at 85.9%, 83.9%, and 93.6%, respectively.
IndusInd Bank derivative contracts’ open interest was 112.2% of its MWPL on 18 March, compared to 91.7% for Steel Authority of India.
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 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.
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