On September 20, 2024, the National Stock Exchange (NSE) announced that 12 stocks have been placed under the futures and options (F&O) ban. This action was taken because these stocks have exceeded 95% of the market-wide position limit (MWPL). When a stock surpasses this limit, it is restricted from new trading in the F&O segment. However, trading can still continue in the cash market for these stocks.
Stocks in F&O Ban on September 20
For September 20, 2024, the 12 stocks placed under the F&O ban are:
- Aarti Industries
- Biocon
- Birlasoft
- Chambal Fertilisers and Chemicals
- GNFC (Gujarat Narmada Valley Fertilizers & Chemicals)
- Granules India
- LIC Housing Finance
- National Aluminium
- Oracle Financial Services Software
- PNB (Punjab National Bank)
- RBL Bank
- SAIL (Steel Authority of India)
These stocks have crossed the 95% MWPL limit, and as a result, no new futures or options contracts can be created for these companies during the ban period. However, investors can still buy or sell these stocks in the cash market.
For investors holding F&O contracts in these stocks, the ban does not mean they are stuck. They can still square off or close existing positions. The restriction only applies to opening new F&O positions. It is important for traders to be aware of these bans because they affect trading strategies, particularly for those who rely on F&O trading for their investments.
Although the F&O ban may reduce speculation, it can sometimes lead to lower liquidity in the market for these stocks. With fewer investors trading F&O contracts, trading volumes might decrease, which could potentially affect the stock prices. However, this impact is usually short-term, and stocks are often removed from the ban list once market activity stabilizes.
The F&O ban is a regular part of market regulation and aims to control excessive trading activity in specific stocks. For September 20, 2024, 12 stocks have been included in the ban list, which means no new F&O positions can be taken for these stocks, but they are still available for trading in the cash market. Investors should stay informed about these updates to avoid unexpected limitations on their trading strategies and to ensure they make well-informed decisions about their investments.