Under the futures and options (F&O) segment, five stocks were banned from trade on Thursday, 28 May, by the National Stock Exchange (NSE). The securities banned for the F&O trade are Biocon, Gujarat Narmada Valley Fertilisers & Chemicals, Hindustan Copper, Vodafone Idea, and Piramal Enterprises.

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, Biocon, and Gujarat Narmada Valley were retained on the list from Monday as the open interest as a percentage of the MWPL of its F&O contracts stood at 103.4%, 98.3%, and 87.4%, respectively. Vodafone Idea derivative contracts’ open interest is 98.8% of its MWPL on 28 May, compared to 85.4% for Piramal Enterprises.

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 Bandhan Bank, The India Cements, National Aluminium, and Punjab National Bank declined below the 80% limit to 76.7%, 76.7%, 77%, and 74.9%, respectively. Hence, it was removed 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.