Why is intraday trading of stocks using MIS (Long and Short) not allowed on the IPO listing day?
On the IPO listing day, stocks can be highly volatile and prone to hit upper or lower circuits. If a stock hits the circuit limit, you may not be able to square off any intraday positions you have entered. This trade can then either result in the conversion of an intraday buy trade into a delivery position or auction penalties (for intraday sell orders that you have been unable to square off).
To reduce this risk, a block on intraday (MIS) trades is generally put in place for the first two hours of IPO listing. The block can be maintained for the whole day or discontinued at the discretion of our risk management team.
During the block period, you will be able to buy or sell the IPO listing stock using the longterm (CNC) product category as shown below:
Note: You will not be able to sell stocks using the longterm product type unless you have the stocks in your holdings.