The stock market saw some changes today as 15 stocks were banned from trading in the futures and options (F&O) segment. This means investors couldn’t buy or sell these stocks using options or futures contracts.
The stocks that were banned include big names like Punjab National Bank (PNB), Steel Authority of India (SAIL), and Sun TV Network. Other companies on the list are Aditya Birla Capital, Aditya Birla Fashion and Retail, Biocon , Bandhan Bank, Birlasoft , Hindustan Copper ,India Cements, Granules India, RBL Bank , IndiaMart , LIC Housing Finance , and Manappuram Finance.
The F&O ban list is a regulatory measure used by the NSE when the open interest (OI) on a stock surpasses 95% of the market-wide position limits (MWPL).
The ban on F&O trading doesn’t mean these stocks can’t be bought or sold at all. Investors can still buy and sell the shares of these companies in the regular stock market. However, they won’t be able to use options or futures contracts to trade them.
The ban on F&O trading is usually temporary. The stock market authorities will review the situation and may lift the ban if the volatility in the stock prices decreases.
Investors who were holding options or futures contracts on these banned stocks would have needed to either square off their positions or roll over their contracts to a different expiry date before the ban came into effect.
This ban highlights the importance of monitoring market movements and being cautious when trading in volatile stocks, especially using options and futures. Investors should always do their own research and consider their risk tolerance before making any investment decisions.