Under the futures and options (F&O) segment, four stocks were banned from trade on Wednesday, August 3, by the National Stock Exchange (NSE). 

The securities banned for F&O trade are Hindustan Copper, Piramal Enterprises, Indiabulls Housing Finance and Gujarat Narmada Valley Fertilizers & Chemicals.

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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. 

The open interest for the derivative contracts of Piramal Enterprises stood at 85.6% at the closing time on Wednesday, while that of Indiabulls Housing was 80.2%. Hindustan Copper’s open interest reached 107.4% of the MWPL. 

All the above securities were retained on the list from Wednesday, August 2. Gujarat Narmada Valley Fertilizers and Chemicals was added to the list as the open interest of its F&O contracts touched 95.3% Tuesday.

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.