The National Stock Exchange (NSE) has placed Manappuram Finance Ltd on the Futures and Options (F&O) ban list for February 19, 2025. This means that traders cannot take new positions in its derivative contracts, but trading in its cash market shares will continue as usual.
A stock enters the F&O ban list when its open interest (OI) crosses 95% of the Market-Wide Position Limit (MWPL) set by the exchange. Open interest refers to the total number of outstanding futures and options contracts for the stock. When this limit is breached, the stock is temporarily banned from F&O trading to control excessive speculation and market volatility.
For long-term investors, the F&O ban does not affect the company’s fundamentals. It is only a technical restriction to manage market risks. However, the ban may cause short-term price movements due to reduced F&O trading activity.
Once the stock’s open interest falls below the MWPL limit, the ban will be lifted, and normal F&O trading will resume. Traders should keep an eye on NSE updates to track when Manappuram Finance exits the ban list.
The F&O ban on Manappuram Finance is a temporary restriction and does not indicate any fundamental issues with the company. Traders and investors should stay updated with market trends, company announcements, and stock exchange notifications to make informed decisions.
