The National Stock Exchange (NSE) recently announced that trading in 15 stocks has been banned in the futures and options (F&O) segment due to exceeding 95% of the market-wide position limit (MWPL). This move aims to prevent excessive speculation and manipulation in these stocks. However, these stocks will still be available for trading in the cash market, providing investors with alternative avenues for trading.
The NSE updates the list of securities in the F&O ban for trade every day, based on their market-wide position limits. This ensures that trading activities remain within regulatory limits and promotes fair and transparent market practices. The F&O ban list serves as a regulatory tool to maintain market stability and integrity.
The 15 stocks currently on the NSE’s F&O ban list include Aditya Birla Capital, Aditya Birla Fashion and Retail, Bandhan Bank, Biocon, Birlasoft, Granules India, Hindustan Copper, India Cements, IndiaMart, LIC Housing Finance, Manappuram Finance, PNB, RBL Bank, SAIL, and Sun TV. These stocks have seen derivative contracts exceeding the prescribed limits, leading to their placement in the ban period.
According to the NSE statement, clients and members are advised to trade in the derivative contracts of these securities only to decrease their positions through offsetting positions. Any increase in open positions during the ban period may result in penal and disciplinary action. No new positions are allowed in these stocks until they are removed from the ban list by the stock exchange.
In recent market developments, stock markets closed marginally lower on August 12, with the Sensex and Nifty experiencing volatility throughout the trading session. Private banks‘ gains helped the benchmark Sensex recover some early losses caused by allegations against Sebi chief Madhabi Puri Buch and her husband by the US short-seller Hindenburg Research.
The Sensex closed lower by 56.99 points or 0.07% at 79,648.92, with 18 constituents ending with losses and 12 with gains. The Nifty dipped 20.50 points or 0.08% to 24,347, hitting a low of 24,212.10 and a high of 24,472.80 during the day. In the broader market, the BSE small-cap gauge climbed 0.51%, while the mid-cap index rose marginally by 0.04%.
Overall, the F&O ban list plays a crucial role in regulating trading activities and maintaining market stability. Investors should stay informed about the stocks on the ban list and adhere to regulatory guidelines to ensure a fair and transparent trading environment.