Ban period for F&O contracts:
If the total number of open F&O contracts in a stock(open interest) exceeds 95% of the MWPL, then the contracts go into a ban period. No new positions should be added to the exceeded open interest, the broker will be penalized by the exchange if new positions are added in his account. Clients/ Brokers should trade only to decrease their positions through offsetting positions till the normal trading in the scrip is resumed.
The normal trading in the scrip is resumed only after the open interest comes down to 80% or below of the market wide position limit.
1 Like