On September 20, the National Stock Exchange added two stocks to its F&O ban list after violating 95% of the market-wide position limit.

Delta Corp and Escorts Kubota are the latest additions to the list. The two traded in opposite directions on September 19, with Delta Corp down 4.6% and Escorts up 8%.

Escorts Kubota, the third-biggest gainer in the futures and options space, rose 8% on Monday to settle at an all-time closing high of Rs 2,086 and formed a bullish pattern on the daily chart. Additionally, it broke strongly above the slightly downward sloping resistance trendline around September 2 and 16.

Delta Corp has observed a bearish pattern on the daily chart, which is similar to the formation of an evening star pattern when you consider the trend over the past three days.

Indiabulls Housing Finance, India Cements, PVR and RBL Bank were on the F&O ban list for another trading day. NSE said that if securities derivative contracts exceed 95% of the overall market position limit, they will eventually be placed on the ban list.

“All clients/members may only trade securities derivative contracts to reduce positions by offsetting them. Any increase in vacancies will result in appropriate criminal and disciplinary action,” it said.

Traders are not allowed to take new stock positions during the ban, but they can start reducing their holdings. F&O restriction rules help in reducing stock speculation.

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

NSE said that normal trading in securities would resume only when the exchange’s total open interest falls below 80% or the market-wide position limit.