The National Stock Exchange (NSE) keeps a close eye on stock trading activity, particularly in the derivatives market where investors can buy and sell contracts based on future stock prices. Today, on July 19th, 2024, eleven stocks found themselves on the NSE’s Futures & Options (F&O) ban list.
When the OI for a stock crosses 95% of the exchange’s set limit, it indicates a potential for excessive speculation or volatility. To prevent this, the NSE puts the stock on the F&O ban list. This means new buying of options contracts for these stocks is restricted. Existing holders can only square off their positions by selling their contracts.
The eleven stocks on the NSE’s F&O ban list today include:
- Balrampur Chini Mills
- Bandhan Bank
- GMR Infrastructures Limited
- Gujarat Narmada Valley Fertilizers and Chemicals (GNFC)
- Hindustan Aeronautics Limited (HAL)
- Hindustan Copper Limited
- The India Cements Limited
- Piramal Enterprises Limited
- RBL Bank
- Steel Authority of India (SAIL)
- Vedanta Limited
For investors holding stocks on the ban list, there’s no immediate need to panic. You can continue holding the underlying stock (shares) if you bought them for the long term. If you were planning to buy options contracts for these stocks, you’ll have to wait until the ban is lifted.
This is a good opportunity to:
- Review your investment strategy for these stocks.
- Consider alternative investment options if you were planning short-term options trading.
- Stay informed about any news or events that might be impacting these companies.
Remember: The F&O ban is a temporary measure to ensure market stability. It’s important to stay informed and make informed investment decisions based on your financial goals and risk tolerance.