Under the futures and options (F&O) segment, three stocks were banned from trade on Friday, August 4, by the National Stock Exchange (NSE). 

The securities banned for F&O trade are Hindustan Copper, Gujarat State Fertilizers & Chemicals (GSFC) 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 83.7% at the closing time on Thursday, while that of GSFC was 89.7%. Hindustan Copper’s open interest reached 102.2% of the MWPL. 

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.

All the above securities and Indiabulls Housing Finance were also on the list on Thursday, August 3. Indiabulls Housing exited the list of banned securities as the open interest for its F&O contracts had reached 77.1% of its MWPL upon closing 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.