Why do F&O contracts enter ban period?

The F&O contracts of stock enter the ban period when the open interest of any stock crosses 95% of the Market Wide Positions Limits (MWPL). The ban is reversed only if the open interest falls below 80%. To learn more, visit nseindia.com/products-services/equity-derivatives-position-limits.

New positions are not allowed for any stock F&O contracts in the ban period. However, exiting the open positions is allowed. The stock can still be traded in the cash segment where no such limits are applicable. The list of securities under the ban period can be found on Zerodha’s margin calculator (WEB).

Did you know? The ban period is not applicable for index F&O contracts.