The National Stock Exchange (NSE) has barred nine stocks from futures and options (F&O) trading for today’s session after they exceeded 95% of the market-wide position limit (MWPL). This limit determines the maximum number of open contracts allowed for trading.
NSE F&O Ban List
Stocks on the ban list include:
- Aditya Birla Fashion & Retail
- Bandhan Bank
- Can Fin Homes
- Dixon Technologies
- Mahanagar Gas
- IndiaMART Intermesh
- L&T Finance
- Manappuram Finance
- Punjab National Bank
Previously, stocks like RBL Bank faced similar restrictions, highlighting the increasing trend of securities breaching MWPL thresholds.
What Does the Ban Mean for Traders?
The NSE imposes F&O trading restrictions to curb excessive speculative activity. During the embargo period:
- No New Positions: Traders cannot initiate fresh positions in the listed securities.
- Focus on Reducing Open Interest: Current traders must offset or reduce their positions to avoid penalties.
Once the MWPL falls below 80%, these restrictions will be lifted, allowing normal trading activity to resume.
NSE’s Statement on the Embargo
The exchange emphasized that any increase in open interest during the embargo period will attract penalties and disciplinary action. The objective is to ensure market stability and prevent excessive volatility in the securities under restriction.
Recent Additions to the F&O Ban List
On January 20, Bandhan Bank, RBL Bank, and Can Fin Homes were retained in the ban list due to high open interest, with figures at 83.7%, 87.8%, and 80.8%, respectively. More recently, Kalyan Jewellers, Dixon Technologies, and Mahanagar Gas were added as their F&O contracts exceeded 115% and 97.7% of the MWPL, respectively.
Market Outlook Amid Restrictions
Despite these trading bans, the broader domestic stock market showed a positive trend. IT, consumer durables, and commodity stocks drove gains, suggesting resilience in other sectors.
Conclusion
The NSE’s F&O restrictions underscore the importance of market-wide position limits in maintaining trading discipline. While these bans may limit speculative opportunities, they aim to ensure a stable and balanced trading environment. Traders should monitor MWPL updates closely and plan their strategies accordingly.
Read Also: 101 Best Small Business Ideas to Start