On September 18, 2024, the National Stock Exchange (NSE) updated its Futures and Options (F&O) ban list, restricting trading in ten stocks. These stocks have exceeded 95% of the Market-Wide Position Limit (MWPL), which is a threshold set by regulators to prevent excessive speculation. Once stocks cross this limit, they are placed under a trading ban in the F&O segment.
Stocks in the Ban for September 18, 2024
The ten stocks under the F&O ban as of September 18 include some big names in the Indian market. The following are the stocks currently banned:
- Aarti Industries
- Balrampur Chini Mills
- Biocon
- Birlasoft
- GNFC (Gujarat Narmada Valley Fertilizers & Chemicals)
- Granules India
- Hindustan Copper
- LIC Housing Finance
- PNB (Punjab National Bank)
- RBL Bank
While these stocks are banned in the F&O segment, investors can still trade them in the cash market. The cash market refers to regular stock buying and selling, where investors trade shares directly rather than through contracts tied to future prices or options.
This rule prevents large traders from taking massive positions in a stock, which could lead to price manipulation or high volatility. By limiting the total amount of F&O trading, the stock market remains more balanced and less risky for everyday investors.
Another impact could be on the stock prices themselves. When a stock enters the F&O ban list, it sometimes leads to higher price volatility as traders adjust their strategies. Some traders might move to the cash market or use other ways to express their views on the stock.
The F&O ban is a tool used by the NSE to maintain order and stability in the stock market. For September 18, 2024, ten major stocks have been placed under this ban, including companies from a range of sectors. While this restricts F&O trading, regular trading in the cash market is still allowed. Investors should keep an eye on market conditions and be cautious when investing in stocks that are subject to high volatility or excessive speculation. Always consider consulting a financial advisor to make informed decisions about your investments.
