95 percent of the market-wide position limit

Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.


Google says – A market - wide position limit is the maximum number of open positions allowed across all F&O contracts of the underlying stock. The market - wide position limit is 20 percent of the free float market capitalisation of a stock. … It is applicable only to stocks which are eligible to be traded in the derivatives segment.

So here I want to know what do the operators get by making a stock cross 95% of the market - wide position limit. And what does this actually mean.

If it crosses 95%, no new FNO positions can be made in ban period. Only existing ones can square off.

If it falls back from > 95% to 80%, then the ban is removed (I think). And then you can make new FNO positions on the stock.

No one tries to take the stock into ban, its just when there is big news on the stock, lot of people take positions on it, and it goes to ban. That’s it.