Under the futures and options (F&O) segment, four stocks were banned from trade on Wednesday, 26 June by the National Stock Exchange (NSE). The securities banned for the F&O trade are Gujarat Narmada Valley Fertilisers and Chemical Limited, Indus Towers Ltd, Punjab National Bank, 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 and Indus Towers were retained on the list from Tuesday as the open interest as a percentage of the MWPL of its F&O contracts stood at 97.7% and 146.3%, respectively. Punjab National Bank derivative contracts’ open interest was 88.3% of its MWPL on 26 June, compared to 88.4% for the Steel Authority of India.

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 Ltd, Chambal Fertilisers Ltd, Granules India Ltd, and Piramal Enterprises Ltd declined below the 80% limit to 78%, 74.6%, 73.8%, and 79.4%, respectively. Hence, they were 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.