Under the futures and options (F&O) segment, seven stocks were banned from trade on Friday, October 20, by the National Stock Exchange (NSE). The securities banned for the F&O trade are Balrampur Chini Mills, Delta Corp, Gujarat Narmada Valley Fertilizers & Chemicals (GNFC), India Cements, Indiabulls Housing Finance, Manappuram Finance and Multi Commodity Exchange (MCX).
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.
The open interest for the derivative contracts of India Cements stood at 82.6% of its MWPL at the closing time on Thursday, while that of Manappuram was 80.2%. Delta Corp and GNFC saw the open interest for their F&O contracts touch 81.6% and 80.1%, respectively, on October 19.
The combined open interest for the derivatives contracts of Indiabulls Housing and MCX stood at 83% and 80.1% of their MWPL on Thursday. Balrampur Chini Mills saw the open interest for their F&O contracts touch 85.3%. All the above securities were retained on the list from Thursday, October 19.
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 Hindustan Copper and Steel Authority of India Ltd (SAIL) declined below the 80% limit to 78.2% and 79.8%, respectively. They, hence, were exited from the list on Friday.
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.