The National Stock Exchange (NSE) banned the trading of futures and options (F&O) up to zero stock/security on Thursday, September 1, 2022.

Also Read| Gautam Adani now the world’s 3rd richest person, Mukesh Ambani at 11th spot

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

The Sensex climbed 1564.45 points or 2.70% to 59,537.07 and the Nifty was up by 446.40 points or 2.58% to 17,759.30 on Tuesday.

Also Read| How Paul Volcker tamed inflation with two recessions in 1980s

The Sensex touched a high and low of 59,599.78 and 58,245.49, respectively. All 30 stocks were advancing on the index. 

Also Read| Mukesh Ambani buys son Anant Dubai’s costliest home: All details here

The Nifty traded in a range of 17,777.65 and 17,401.50. All the 50 stocks were advancing on the index.

Also Read| Reliance AGM 2022: 10 Key highlights

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| Jackson Hole Symposium 2022: 5 key takeaways from Jerome Powell’s speech

“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| Indian government plans to sell at least 51% of IDBI Bank: Report

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

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

Also Read| The 2008 market crash: Inside the doomsday machine and a brief history

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.