A total of five names have been added 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.
SAIL was the latest stock to come under the F&O ban list published by the exchange on January 13. Vodafone Idea, Indiabulls Housing Finance, RBL Bank, and Delta Corp continue to be on the exchange’s F&O ban list.
Derivative contracts in these five 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.