06 Oct , 2021 By : Kanchan Joshi
National Aluminium Company Limited (Nalco) is the only stock that has been put under the futures and options (F&O) ban for trade by the National Stock Exchange (NSE) on Wednesday, October 6, 2021. The scrip is banned under the F&O segment as it has crossed 95% of the market-wide position limit (MWPL), as per the NSE.
Nalco is a Navratna CPSE under the Ministry of Mines. The company has integrated and diversified operations in mining, metal and power. Shares of Nalco have given multibagger returns this year by surging over 130% in 2021 (year-to-date or YTD) so far. Meanwhile, the mining company's stock has rallied 220% in the past year.
The derivative contracts in the mentioned securities have crossed 95% of the market-wide position limit and are therefore have been currently put in the ban period by the stock exchange.
“It is hereby informed that all clients/members shall trade in the derivative contracts of said security only to decrease their positions through offsetting positions," the stock exchange said. "Any increase in open positions shall attract appropriate penal and disciplinary action," NSE added.
No fresh positions are allowed for any of the F&O contracts in that particular stock when it is under the F&O ban period. The MWPL (market-wide position limit) is set by the stock exchanges, which is the maximum number of contracts that can be open at any time (Open Interest), therefore, the F&O contracts of that stock enter a ban period if the open interest crosses 95% of the MWPL.
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