Under the futures and options (F&O) segment, eight stocks were banned from trade on Tuesday, 27 August, by the National Stock Exchange (NSE). The securities banned for the F&O trade are Aarti Industries Ltd, Aditya Birla Fashion and Retail, Balrampur Chini Mills Ltd, Birlasoft Ltd, Chambal Fertilizers Ltd, Indian Energy Exchange Ltd, The India Cements Ltd, 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. 

Aarti Industries, Aditya Birla Fashion, and Birlasoft were retained on the list from Monday as the open interest as a percentage of the MWPL of its F&O contracts stood at 82.2%, 81.2% and 88.9%, respectively. Balrampur Chini Mills derivative contracts’ open interest is 88.6% of its MWPL on 27 August, compared to 86.1% for Chambal Fertilizers. 

Furthermore, Indian Energy Exchange, India Cements, and RBL Bank were also retained on the list as their open interest is 81.5%, 114.3%, and 85.6%, 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 Gujarat Narmada Valley Fertilizers and Chemicals, Granules India Ltd, Hindustan Copper Ltd, National Aluminium, and Sun TV Network Ltd declined below the 80% limit. Hence, it was removed from the list on Tuesday.

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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