How to trade a stock which is going to be in F&O ban?
Today(30/05/2018) one business channel aired that GMR infra/ IDFC bank might go in F&O ban tomorrow because they are reaching market wide limit. I would like to create F&O position in these stock before they go in f&O ban. what is the best strategy to trade these stock through selling option?
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Hello Manish,
Even I also have been keeping an eye on such scrips , No stock can be in a BAN PERIOD for a longer time span . what I normally track is which stock is under BAN PERIOD for today ? Is it getting attention of Smart Money? like normal stuffs , recent example is Just dial , it was under BAN PERIOD when it hit lower circuit , within a span of 10 days (approx) it reached upper circuit . Counter trading is a better option when a stock comes out of the BAN PERIOD list . same thing happened with PC Jewelers also . It is based on my observation , Kindly back test and apply your strategy.
Happy Trading!
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Thanks for your valuable suggestion
Welcome Manish ,
Happy Trading
Maximum How long this ban period could last? Will I get time decay advantage during this ban period?
Is it possible that any share can be banned for F&O trading permanently by SEBI?
Option sellers better stay away from FNO banned stocks. Because ban means more volatility (either up or down), so better be a buyer in that scenario.
Also usually stocks are not in ban period for more than 1 week.
Maximum I saw was ADANIENT and ADANIPOWER couple months ago, where they were in ban 20+ days in the entire month