The National Stock Exchange (NSE) has placed Deepak Nitrite Ltd. on the Futures and Options (F&O) ban list on February 17. This action was taken because the stock’s derivative contracts exceeded 95% of the market-wide position limit (MWPL).
The NSE imposes an F&O ban when the total open interest (OI) in a stock’s derivatives segment crosses 95% of the MWPL. This rule is in place to prevent excessive speculation and ensure market stability. When this limit is breached, the stock is placed under restriction to avoid high volatility.
This ban only applies to F&O trading. Investors can still buy and sell Deepak Nitrite shares in the cash market without any restrictions.
The NSE reviews the trading activity in the stock daily. If the open interest drops below the limit, the exchange will remove the ban. Until then, traders must follow the ban restrictions.
The NSE updates the F&O ban list daily based on market activity. Traders should check the latest list before trading to avoid any restrictions.