Under the futures and options (F&O) segment, seven stocks were banned from trade on Tuesday, 23 July, by the National Stock Exchange (NSE). The securities banned for the F&O trade are Bandhan Bank, Chambal Fertilizers Ltd, Gujarat Narmada Valley Fertilizers and Chemicals, Hindustan Aeronautics, The India Cements Ltd, Piramal Enterprises, 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. 

Bandhan Bank, Hindustan Aeronautics, and India Cements were retained on the list from Monday as the open interest as a percentage of the MWPL of its F&O contracts stood at 81.9%, 80.6%, and 126.1%, respectively. Piramal Enterprises’ derivative contracts’ open interest is 80.9% of its MWPL on 23 July, compared to 86.6% for Piramal Enterprises. 

The above securities were retained on the list from Monday, 22 July. Chambal Fertilizers Ltd and Gujarat Narmada Valley were added to the list on Tuesday as the open interest of their F&O contracts reached 95.2% and 101.2%, respectively.  

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 Balrampur Chini Mills, GMR Airports, Hindustan Copper,  and Vedanta Ltd declined below the 80% limit to 74.5%, 78.2%, 77.4%, and 78.1%, 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.

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