On Wednesday, December 4, 2024, the National Stock Exchange (NSE) announced that three stocks Granules India, Manappuram Finance, and RBL Bank have been added to the Futures and Options (F&O) ban list. These stocks exceeded 95% of the Market-Wide Position Limit (MWPL), leading to their restriction in the derivatives segment.
The F&O ban list helps regulate market volatility and limit excessive speculation in the stock market. When a stock crosses 95% of its MWPL, it indicates that trading activity in its derivative contracts is too high. As a result, the NSE places such stocks under the F&O ban period to stabilize the market.
Once a stock is added to this list, new positions in its F&O contracts cannot be taken. However, traders with existing positions are allowed to square off, meaning they can close their trades.
If you are planning to trade these stocks, it’s best to wait for the ban to be lifted. For existing positions, ensure you monitor market conditions and consult your financial advisor to decide the best course of action.
Key Points for Investors:
- Stocks on the Ban List: Granules India, Manappuram Finance, and RBL Bank are currently subject to F&O trading restrictions.
- Cash Market Trading: These stocks can still be traded in the cash market without restrictions.
- NSE Updates: The F&O ban list is refreshed daily, so staying informed is essential for active traders.
The F&O ban is a temporary measure to reduce market speculation and protect investors from excessive risk. If you are affected, focus on monitoring updates from the NSE and plan your investments accordingly. Always trade responsibly and stay informed to make better decisions in the stock market.
