Under the futures and options (F&O) segment, four stocks were banned from trade on Thursday, 31 October, by the National Stock Exchange (NSE). The securities banned for the F&O trade are IDFC First Bank Ltd, Indiamart Intermesh Ltd, Punjab National Bank, and RBL Bank Ltd.

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.

IDFC First Bank, Indiamart Intermesh, Punjab National Bank, and RBL Bank were retained on the list from Wednesday as the open interest as a percentage of the MWPL of its F&O contracts stood at 80.4%, 80.1%, 81.8%. And 81.2%, 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 L&T Finance Ltd and Manappuram Finance Ltd declined below the 80% limit. Hence, they were removed from the list on Thursday.

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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