F&O Ban on March 11: Hindustan Copper, Manappuram Finance Shares Under Trading Restriction

On Tuesday, March 11, the National Stock Exchange (NSE) imposed a trading ban on three stocks in the futures and options (F&O) segment. This action was taken because the combined open interest in these stocks exceeded 95% of the market-wide position limit (MWPL), which is the maximum level of open interest allowed for a particular stock across all F&O contracts.

The market-wide position limit is a regulatory measure designed to prevent excessive speculation and maintain market stability. When the open interest in a stock crosses this threshold, the exchange restricts further trading in the F&O segment to control volatility and reduce the risk of market manipulation.

Despite the ban in the F&O segment, these stocks will still be available for regular trading in the cash market. This means investors can continue to buy and sell these stocks through the regular equity market channels, but no new F&O contracts can be initiated until the open interest falls below the prescribed limit.

The NSE regularly monitors market activity and updates the list of securities under the F&O ban on a daily basis. This allows the exchange to adjust its measures in response to changing market conditions and ensure that trading remains orderly and within regulatory limits.

On Monday, March 11, three stocks—BSE Ltd, Hindustan Copper Ltd, and Manappuram Finance Ltd—have been placed on the National Stock Exchange’s (NSE) futures and options (F&O) ban list. This means that trading in the F&O segment for these stocks is restricted for the day.

The ban is imposed when the combined open interest in a stock’s F&O contracts exceeds 95% of the market-wide position limit (MWPL). The MWPL is a regulatory threshold set to prevent excessive speculation and maintain market stability. When the open interest crosses this limit, the exchange enforces a trading ban in the F&O segment to reduce the risk of high volatility and market manipulation.

While trading in the F&O segment for these stocks is restricted, they will still be available for buying and selling in the cash market. Investors can continue to trade these stocks through the regular equity market, but no new F&O contracts can be initiated until the open interest drops below the specified limit.

The NSE monitors market-wide open interest levels regularly and updates the list of securities under the F&O ban on a daily basis. This ensures that trading activity remains orderly and within the regulatory framework.

The National Stock Exchange (NSE) announced that the derivative contracts of a particular stock have crossed 95% of the market-wide position limit (MWPL), leading to the stock being placed under a trading ban in the futures and options (F&O) segment. The MWPL is a regulatory threshold designed to prevent excessive speculation and maintain market stability. When the open interest in a stock’s F&O contracts exceeds this limit, the exchange imposes a ban to control market volatility and reduce the risk of price manipulation.

According to the NSE’s statement, once a stock is placed under the F&O ban, trading activity in its derivative contracts is strictly limited to reducing existing positions. This means that traders and investors are only allowed to close out or offset their current positions. They are not permitted to initiate any new positions in the F&O segment for that particular stock until the open interest falls below the prescribed limit.

The exchange further clarified that any attempt to increase open positions while the stock is under the F&O ban could result in regulatory penalties and disciplinary action. This measure is intended to ensure orderly market functioning and to prevent speculative trading from destabilizing the stock’s price.

The NSE regularly monitors open interest levels and updates the list of stocks under the F&O ban on a daily basis. The ban is lifted once the open interest in the stock’s derivative contracts drops below the 95% threshold, allowing normal trading activity to resume.

On Monday, March 10, the benchmark stock indices, Sensex and Nifty, experienced a volatile trading session, ultimately closing lower after giving up their early gains. The market had opened on a positive note, with both indices showing strength in the early hours of trading. However, the momentum did not hold, as selling pressure emerged later in the day, particularly in the industrial and oil & gas sectors.

During the last hour of trading, heightened selling activity in these sectors weighed heavily on the indices, causing them to reverse their initial gains. The decline in industrial and energy-related stocks reflected broader market weakness and investor caution, contributing to the downturn in overall market sentiment.

Market volatility was evident throughout the session, with fluctuations driven by sector-specific weakness and broader market trends. Despite the positive start, the late-session sell-off underscored the fragile market mood and the influence of sectoral performance on overall index movements.

Both Sensex and Nifty ultimately ended the day in negative territory, highlighting the impact of sectoral weakness and profit booking in key stocks. The market’s inability to sustain early gains reflects the cautious approach adopted by investors amid ongoing market uncertainties.

On Monday, the 30-share BSE Sensex ended the trading session with a decline of 217.41 points or 0.29%, settling at 74,115.17. Out of the 30 constituent stocks in the Sensex, 22 stocks closed in the red, while eight stocks managed to post gains.

The trading day began on a positive note, with the Sensex opening higher and reaching an intraday high of 74,741.25. However, the upward momentum was short-lived as selling pressure emerged in the later part of the session. The index faced significant downward movement during the pre-closing hours, falling by 310.34 points or 0.41% from its peak to touch an intraday low of 74,022.24 before partially recovering by the close.

Similarly, the broader NSE Nifty also ended lower, shedding 92.20 points or 0.41%, to close at 22,460.30. The Nifty followed a similar pattern as the Sensex, opening strong but losing ground in the second half of the session due to increased selling activity, particularly in industrial and oil & gas stocks.

The market weakness was more pronounced in the broader indices. The BSE small-cap index suffered a sharp decline of 2.11%, indicating that smaller stocks faced heavy selling pressure. The mid-cap index also dropped by 1.46%, reflecting a broad-based correction across mid-sized companies.

The market’s overall performance highlighted cautious investor sentiment, with late-session volatility and profit booking dragging down key indices and broader market segments.