For Friday, January 14, the National Stock Exchange has added three stocks to the list of stocks that are banned from trading in the futures and options segment after these securities crossed 95 percent of the market-wide position limit.
The total list of stocks has been reduced to three today, from five stocks in the previous session i.e. Thursday. Now Delta Corp and RBL Bank are allowed to trade in the F&O segment as the exchange removed them from the ban list.
Indiabulls Housing Finance, Vodafone Idea, and SAIL continue to be on the F&O ban list published by the exchange.
Derivative contracts in these three securities crossed 95 percent of the market-wide position limit and hence they are on the ban list, the NSE said.
“All clients/members shall trade in the derivative contracts of said security only to decrease their positions through offsetting positions. Any increase in open positions shall attract appropriate penal and disciplinary action,” the NSE said.
During the ban, traders are not allowed to take fresh positions in stocks under the F&O ban, but they can start reducing their positions. The F&O ban rule helps to reduce speculation in a stock.
The market-wide position limit, which is set by the stock exchanges, is the maximum number of outstanding open positions (buy and sell) in the F&O contracts of security. If the open interest in a stock crosses 95 percent of the market-wide position limit, then its F&O contracts enter the ban period.
Normal trading in security resumes only after the aggregate open interest across exchanges comes down to 80 percent or below the market-wide position limit, the NSE said.