Under the futures and options (F&O) segment, seven stocks were banned from trade on Friday, 20 December, by the National Stock Exchange (NSE). The securities banned for the F&O trade are Bandhan Bank, Granules India, Hindustan Copper, Manappuram Finance, NMCD, PVR Inox, 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.

Manappuram Finance, Steel Authority of India, NMDC, and PVR Inox were retained on the list from Thursday as the open interest as a percentage of the MWPL of its F&O contracts stood at 90.4%, 84.2%, 88.9%, and 82.3%, respectively. Granules India derivative contracts’ open interest is 92% of its MWPL on 20 December, compared to 88.6% for Hindustan Copper and 92.1% for Bandhan Bank.  

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 F&O contracts of Chambal Fertilizers, National Aluminium, and RBL Bank declined below the 80% limit. Hence, it was removed from the list on Friday.

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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