In a move to control excessive speculation, the National Stock Exchange (NSE) has placed five stocks under the futures and options (F&O) ban for Monday, March 17, 2025. These include IndusInd Bank, Steel Authority of India Ltd (SAIL), BSE Ltd, Manappuram Finance Ltd, and Hindustan Copper Ltd.
This restriction comes into effect because these stocks crossed 95% of the market-wide position limit (MWPL)—a threshold set by regulators to prevent market manipulation and excessive speculation.
What Does the F&O Ban Mean?
When a stock is placed under the F&O ban, traders cannot open new positions in its futures and options contracts. However, they can still exit existing positions by squaring them off. The restriction remains in place until the open interest in these stocks falls below 80% of MWPL.
Why These Stocks Are on the List
Here’s a look at why these five stocks landed in the F&O ban today:
-
IndusInd Bank: The stock has been on a downward spiral, losing 26% of its market value in just five days. The fall is linked to accounting concerns and uncertainty over its CEO’s tenure after the Reserve Bank of India (RBI) extended his term by just one year instead of three. The stock is also under the Additional Surveillance Measure (ASM) – Stage 1, making investors extra cautious.
-
BSE Ltd: The stock has dropped 5% in the last five trading sessions and is down 25% in a month. The decline follows a rule change by NSE, which moved the expiry of its weekly index derivatives to Monday—one day before BSE’s expiry—potentially reducing BSE’s trading volumes.
-
SAIL: Shares of the steel giant have lost 5% in the past week, reflecting a broader slowdown in the steel sector. Major players like Tata Steel and JSW Steel have also faced declines.
-
Manappuram Finance Ltd: While this stock has seen a relatively smaller decline of 0.83% in the last five sessions, it still breached the MWPL threshold.
-
Hindustan Copper Ltd: While detailed data on its recent performance is limited, the stock also crossed the open interest limit, leading to its inclusion in the F&O ban.
What Should Traders and Investors Do?
If you hold positions in these stocks under F&O contracts, you cannot initiate new trades until the restriction is lifted. However, you can still trade these stocks in the cash market as usual.
Investors should keep a close watch on open interest levels and stay updated on NSE announcements regarding when the ban might be lifted.
Why Does NSE Impose an F&O Ban?
The NSE enforces F&O bans to ensure stability in the stock market and prevent excessive speculation. By keeping a check on stocks that see abnormally high trading activity, regulators aim to protect investors from sharp price fluctuations and market manipulation.
Final Thoughts
For traders, an F&O ban is a temporary hurdle but also a sign to exercise caution while dealing with highly volatile stocks. If you’re holding any of these stocks, it’s best to stay informed, follow market trends, and adjust your trading strategy accordingly.
