The National Stock Exchange (NSE), a leading stock exchange, has announced that shares of Intellect Design Arena have been removed from the futures and options (F&O) segment.
It said in a circular on May 19 that contracts for new expiry months would not be issued when existing contracts expired.
“Existing outstanding contracts with expiry months of May 2023, June 2023 and July 2023 will continue to be available for trading until their respective expiry and new strike prices will also be introduced for the existing contract months, “it said.
Therefore, no contract can be used for securities transactions from July 28, 2023, the NSE added.
Nuvama Institutional Equities said in a report that if a stock fails to meet certain parameters (such as average quarterly sigma median, average daily deliverable value, etc.) for three consecutive months, the stock will be excluded from the derivative outside the field of goods.
“The exclusion is driven by the quantitative approach and its pure approach, unlike the inclusion which was ultimately decided by SEBI,” Nuvama added.
As for the impact on stock prices, in 8 of the previous 10 cases, the company’s stock prices experienced a correction in the week before the announcement, with an average drop of 1.9%.
Seven times out of 10, a stock corrected two weeks before the announcement, with an average decline of 2.5%.
“Despite the announcement, there was no clear trend in price performance,” it noted. Shares of Intellect Design Arena have lost 1.7% over the past week.