The F&O ban list is a critical market safeguard published daily by exchanges like the NSE. It highlights stocks that have crossed the trading limit in the derivatives segment. While traders can still square-off existing positions, they are restricted from initiating new futures and options contracts in these stocks.
This system serves several important functions:
• It limits excessive speculation and leverage
• It reduces abnormal volatility in individual stocks
• It protects retail investors from sharp, unpredictable price movements
• It ensures orderly functioning of the market and prevents manipulation
The F&O Market and Why Bans Exist
Trading in the Futures and Options segment allow traders to take positions with leverage, amplifying both potential gains and risks. If left unchecked, this leverage could distort stock prices and threaten market stability.
To manage this, the exchange monitors activity and imposes a ban on stocks that show signs of speculative overheating. This temporary restriction acts as a circuit breaker to keep excessive positions in check and to safeguard investor interests.
Why and When Do Stocks Get Banned in F&O?
A stock is added to the F&O ban list when the total open interest in its derivative contracts exceeds 95% of its Market-Wide Position Limit (MWPL).
MWPL is the maximum number of shares that can be held in open F&O contracts across all market participants. It is usually set at 20% of the company’s free-float shares, excluding promoter holdings.
To summarise:
• A stock enters the F&O ban list when open interest exceeds 95% of MWPL
• A stock exits the list when open interest falls below 80% of MWPL
How Are These Rules Framed and Enforced?
The NSE tracks open interest levels in real-time. Warnings are issued if a stock crosses 60% or 80% of its MWPL.
Ban status is published before the market opens each day and is enforced immediately.
Violating this rule by entering new F&O positions in a banned stock may result in penalties typically 1% of the position value, with a minimum of ₹5,000. Brokers may also reverse such trades or restrict further orders.
F&O Banned Stocks in July 2025
Below is a list of stocks that were banned from F&O trading in July 2025:
• RBL Bank Limited (RBLBANK) was in the ban list almost throughout the month
• Hindustan Copper Limited (HINDCOPPER) remained banned from July 10 to July 21
• Glenmark Pharmaceuticals Limited (GLENMARK) appeared from July 14 to July 16
• Angel One Limited (ANGELONE) was banned between July 17 and July 21
• Bandhan Bank Limited (BANDHANBNK) was listed from July 21 to July 24
• Indian Energy Exchange Limited (IEX) entered the list from July 23 to July 25
These entries often coincide with earnings releases, large price movements, or unusually high trading interest, indicating that speculative positions were building up in the derivative segment.
How Does the Ban Affect Traders and Investors?
• No new F&O positions are allowed in the banned stock
• Square-offs are permitted so you can exit your existing F&O trades
• Cash market trading continues as usual
• Strategy disruptions are common. Traders that are using multi-leg options strategies or arbitrage positions may be forced to exit parts of their trades
• Premium pricing may be impacted due to reduced liquidity
For investors, the ban does not affect long-term holdings in equity. But for short-term traders and options writers, it can affect hedging, spreads, and execution quality.
How To Check If a Stock Is in the F&O Ban List?
You can track the ban status using reliable sources:
• The F&O ban list is uploaded on the official NSE website before every trading session
• You can also view the updated F&O Ban List on the Ventura platform before placing a trade
• Market news websites update the list daily
What Happens When a Stock Exits the Ban List?
Once the open interest falls below 80% of MWPL, the stock is removed from the ban. The exit is announced pre-market, and fresh F&O trading is allowed again under normal risk and margin norms.
However, traders should remain cautious as stocks that recently exited the ban list may re-enter quickly if speculative activity resumes.
What Does This Mean for a Typical Trader or Investor?
Understanding the F&O ban list helps traders avoid penalties and protects against incomplete trade execution.
It also helps in risk management—especially for those that have hedged positions, use options strategies, or utilise intraday setups.
A few key takeaways:
• Always check ban status before initiating any F&O position
• Be cautious when a stock’s open interest is nearing MWPL thresholds
• Have an exit plan in case a stock you’re trading enters the ban list mid-series
Yes, regular buying and selling in the cash market is allowed.
No, the ban applies only to stock-specific F&O contracts.
These are often stocks with lower free float, higher volatility, or frequent news triggers.
You may face financial penalties or trade reversal, depending on your broker and exchange rules.
Yes, if a stock remains illiquid or spends most of three months under ban, it can be de-listed from the F&O segment for a year.
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