The National Stock Exchange (NSE) has announced that nine stocks are banned from trading in the futures and options (F&O) segment on October 8. These stocks are banned because they have crossed 95% of the market-wide position limit (MWPL). This ban helps control excessive trading and speculation, which could lead to sharp price changes.
Stocks Added to the F&O Ban List on October 8
On October 8, the following nine stocks were placed under the F&O ban:
- Bandhan Bank
- Birlasoft
- GNFC (Gujarat Narmada Valley Fertilizers & Chemicals)
- Granules India
- Hindustan Copper
- IDFC FIRST Bank
- Manappuram Finance
- PNB (Punjab National Bank)
- RBL Bank
These stocks have exceeded the 95% limit of their market-wide position. Although they cannot be traded in the F&O segment, investors can still buy and sell shares of these companies in the regular cash market.
The F&O ban is enforced to prevent high-risk trading and speculation in stocks that have become highly volatile. When traders open too many futures and options contracts on a stock, it can lead to unpredictable price movements. The NSE sets the market-wide position limit to control this activity and maintain market stability.
For traders, the F&O ban limits their ability to take new positions in the banned stocks. However, they are still allowed to exit or close their existing positions. This measure is intended to reduce speculative trading and protect investors from extreme price fluctuations.
Although the ban impacts the derivatives market, it does not affect trading in the cash market. Investors can continue to buy and sell shares of the banned stocks without any restrictions in the regular stock market.
The F&O ban is a temporary measure. It is lifted when the open interest in the stock falls below 80% of the market-wide position limit. The NSE monitors these limits daily and updates the F&O ban list as needed. If a stock’s open interest decreases, it can be removed from the ban list, allowing traders to resume trading in the derivatives market.
Staying Informed
Investors can stay informed about the F&O ban list by visiting the NSE website or subscribing to daily updates from financial news platforms. It is important for traders to be aware of which stocks are on the ban list to avoid unexpected restrictions when trading in the F&O segment.
