Under the futures and options (F&O) segment, three stocks were banned from trade on Wednesday, 24 July by the National Stock Exchange (NSE). The securities banned for the F&O trade are Gujarat Narmada Valley Fertilizers and Chemicals, The India Cements Ltd, 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. 

Gujarat Narmada Valley, Steel Authority of India, and the India Cements were retained on the list from Tuesday as the open interest as a percentage of the MWPL of its F&O contracts stood at 85.7%, 80%, and 118.8%, 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 Bandhan Bank, Chambal Fertilizers Ltd, Hindustan Aeronautics, and Piramal Enterprises declined below the 80% limit to 76%, 76.6%, 72%, and 77.4%, respectively. Hence, it was removed from the list on Wednesday.

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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