Under the futures and options (F&O) segment, six stocks were banned from trade on Thursday, November 16, by the National Stock Exchange (NSE). The securities banned for the F&O trade are Delta Corp, Hindustan Copper, Indiabulls Housing Finance, Multi Commodity Exchange of India (MCX), Steel Authority of India Ltd (SAIL), and Zee Entertainment Enterprises Ltd (ZEEL).
Derivative contracts of these stocks were banned as the open market interest for these securities has crossed 95% of the market-wide position limit (MWPL) set by the exchanges. The MWPL is the maximum number of contracts that can be opened at any particular time.
At Wednesday’s closing time, the open interest in ZEEL’s derivative contracts stood at 94% of its MWPL, while that of Delta Corp was 86.2%. The open interest in SAIL’s derivative contracts stood at 87.2% of its MWPL.
Hindustan Copper and Indiabulls Housing were retained on the list as the open interest as a percentage of the MWPL of their F&O contracts stood at 110.2% and 85.5%, respectively, on November 15. All the above securities were retained on the list from Wednesday, November 15.
The ban will be lifted once the position falls below 80%. Traders will get penalised for buying or selling these securities. They will be available for trading in the cash market.
The open interest for the F&O contracts of the Manappuram Finance and Chambal Fertilisers declined below the 80% limit to 78.1% and 79.7%, respectively. Hence, they were exited from the list on Thursday.
The National Stock Exchange updates the list of securities on the F&O ban list daily. This list serves as a guide for traders and investors in the market. Traders who trade in indices do not encounter a situation of security ban.