The National Stock Exchange (NSE) banned the trading of futures and options (F&O) up to zero stock/security on Tuesday, July 12, 2022.

Also Read| US inflation rate at a 40-year high | A timeline: 1930-2022

According to the NSE, stocks are prohibited in the F&O sector because they have exceeded 95% of the market-wide position limit (MWPL).

Also Read| Harshad Mehta scam: How Big Bull shook the Indian stock market

The derivative contracts in the aforementioned securities have exceeded 95% of the market-wide position limit and have thus been placed in a ban period by the stock exchange.

Also Read| Harshad Mehta’s wife Jyoti brings Big Bull’s side of story to light

“It is hereby informed that all clients/members shall trade in the derivative contracts of said security only to decrease their positions through offsetting positions,” the stock exchange said.

Also Read| How To Survive A Market Crash

“Any increase in open positions shall attract appropriate penal and disciplinary action,” NSE added.

Also Read| Great Depression to COVID: Top 5 market crashes in American history

During the F&O ban period, no new positions are permitted for any of the F&O contracts in that stock.

Also Read| Week ahead: Quarterly results, crude price to weigh on Sensex, Nifty

The stock exchanges set the MWPL (market-wide position limit), which is the maximum number of contracts that can be open at any moment (Open Interest) thus, the F&O contracts of that stock enter a ban period if the open interest exceeds 95% of the MWP.