---THREAD ON F&O BAN---
π Whatβs F&O Ban?
Stock goes into ban when combined Open Interest (OI) of both Future & Options contracts across series & across exchanges exceeds 95% of Market Wide Position Limit (MWPL)
Reason for stock going in ban is to curb EXCESSIVE SPECULATION
π Whatβs F&O Ban?
Stock goes into ban when combined Open Interest (OI) of both Future & Options contracts across series & across exchanges exceeds 95% of Market Wide Position Limit (MWPL)
Reason for stock going in ban is to curb EXCESSIVE SPECULATION
π What happens when stock goes into βFNO banβ?
-One CANNOT take Fresh positions
-But CAN square off existing position
-One CANNOT take Fresh positions
-But CAN square off existing position
π Can you trade?
Yes, you can take βINTRA-DAYβ position ONLY if your broker allows
But If intraday position βNOT CLOSED β
Then exchange levies PENALTY of 1% of value of increased position subject to minimum penalty of 5k & max of 1 lakh
Yes, you can take βINTRA-DAYβ position ONLY if your broker allows
But If intraday position βNOT CLOSED β
Then exchange levies PENALTY of 1% of value of increased position subject to minimum penalty of 5k & max of 1 lakh
π When stock is in ban can you reverse an existing position in a stock that is in FNO ban?
'YES'
Example
-If you are long on 2000 Call strike of RIL
-Can reverse with opposite position by selling 2000 Call strike
'YES'
Example
-If you are long on 2000 Call strike of RIL
-Can reverse with opposite position by selling 2000 Call strike
π When does the stock come out of ban?
-When OI falls below 80% of MWPL
Note: Exchange releases MWPL data for all F&O stocks monthly
-When OI falls below 80% of MWPL
Note: Exchange releases MWPL data for all F&O stocks monthly
π WHAT IS MWPL?
Limit used for calculating max no of positions allowed in F&O market
It is lower of:-
-30x average no of shares traded daily in cash segment in the preceding month
-20% of non-promoter holding (free float)
Limit used for calculating max no of positions allowed in F&O market
It is lower of:-
-30x average no of shares traded daily in cash segment in the preceding month
-20% of non-promoter holding (free float)
π When does the stock come out of ban?
-When OI falls below 80% of MWPL
Note: Exchange releases MWPL data for all F&O stocks monthly
-When OI falls below 80% of MWPL
Note: Exchange releases MWPL data for all F&O stocks monthly
π WHAT IS MWPL?
Limit used for calculating max no of positions allowed in F&O market
It is lower of:-
-30x avg no of shares traded daily in cash segment in preceding month
-20% of non-promoter holding (free float)
Limit used for calculating max no of positions allowed in F&O market
It is lower of:-
-30x avg no of shares traded daily in cash segment in preceding month
-20% of non-promoter holding (free float)
π MWPL Explained with an Example
If equity base is 100
Non promoter holding is 60% (60 shares)
No of shares considered for MWPL will be 20% of 60 which is 12 shares
---THREAD CLOSE---
If equity base is 100
Non promoter holding is 60% (60 shares)
No of shares considered for MWPL will be 20% of 60 which is 12 shares
---THREAD CLOSE---
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