Under the futures and options (F&O) segment, six stocks were banned from trade on Tuesday, August 8, by the National Stock Exchange (NSE). 

The securities banned for F&O trade are Balrampur Chini Mills, Gujarat State Fertilizers & Chemicals (GSFC), Hindustan Copper, India Cements, Indiabulls Housing Finance 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. 

The open interest for the derivative contracts of Piramal Enterprises stood at 82.3% at the closing time on Friday, while that of Hindustan Copper was 93.7%. Indiabulls F&O contracts saw their open interest reach 98.7% on Monday. GSFC’s open interest reached 81.4% of the MWPL. 

All the above securities were retained on the list from Monday, August 7. India Cements and Balrampur Chini were added to the list as the open interest of their F&O contracts touched 106.4% and 101.9%, respectively, on Monday.

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.