F&O ban, short for Futures and Options ban, refers to a restriction imposed by stock exchanges on trading in derivatives contracts (futures and options) of certain securities. When a stock enters the F&O ban list, it means that investors and traders are prohibited from initiating new positions in futures and options contracts of that particular security.
What happens when a stock is in F&O ban
When a stock is in F&O ban, existing positions in futures and options contracts can be squared off, but no new positions can be initiated for the securities in the ban period. This restriction aims to prevent excessive speculation and manipulation in the derivatives market, ensuring stability and integrity in trading activities.
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