The National Stock Exchange (NSE) has placed 14 stocks under the Futures and Options (F&O) ban for trading on Monday, October 21. These stocks have crossed 95% of the market-wide position limit (MWPL), which is a threshold set by the NSE to control excessive trading in F&O contracts. When a stock reaches this limit, it is put under the F&O ban to avoid excessive speculation and volatility in the market.
List of Stocks Under F&O Ban on October 21
The following 14 stocks have been included in the F&O ban list for October 21:
- Aarti Industries
- Bandhan Bank
- Birlasoft
- Chambal Fertilisers and Chemicals
- GNFC (Gujarat Narmada Valley Fertilizers & Chemicals)
- Granules India
- Hindustan Copper
- IDFC First Bank
- Indian Energy Exchange (IEX)
- L&T Finance
- National Aluminium Company (NALCO)
- PNB (Punjab National Bank)
- SAIL (Steel Authority of India)
- Tata Chemicals
These stocks have reached or crossed the 95% MWPL mark, leading to their temporary ban from F&O trading.
The F&O ban is primarily enforced to maintain stability in the market. When a stock sees heavy trading and reaches the 95% MWPL, it can become volatile. This volatility may lead to significant price swings, which can hurt retail investors and increase market risks. To prevent this, the NSE imposes the ban until the positions in these stocks come down to a manageable level.
The market-wide position limit is a way of controlling how much exposure traders can take in F&O contracts for a particular stock. Once the positions exceed this limit, it is likely that traders may manipulate prices for their own benefit. The F&O ban prevents this type of activity and helps ensure fair market conditions for all investors.
For investors who were planning to trade in the F&O segment, it is important to note that while these 14 stocks are under the ban, they can still be traded in the cash market. However, no fresh F&O contracts can be initiated. It is essential for investors to adjust their trading strategies accordingly and focus on other available stocks in the F&O market.
Investors holding open F&O positions in any of the banned stocks can still close or reduce their positions but cannot increase them. If you are an investor affected by the F&O ban, it is a good idea to stay updated on the latest market developments and NSE announcements. Staying informed and adjusting your trading strategy is key to navigating these temporary restrictions.
