IDBI Bank, Arvind, MCX and six others excluded from F&O

Our Bureau Chennai | Updated on July 22, 2019 Published on July 22, 2019

Only 152 stocks will be available for trading in the derivatives segment

The NSE said on Monday that it will exclude another nine securities from futures and options (F&O) trading as these were found to be ineligible based on its selection criteria.

The stocks are Arvind, Birlasoft, Engineers India, Hindustan Zinc, IDBI Bank, Kajaria Ceramics, Multi Commodity Exchange of India, Oracle Financial Services Software and Raymond.

No new contracts linked to these stocks will be issued, but the existing July, August and September contracts will be available for trading till their respective expiries, according to a circular on the NSE web site.

In April, the exchange had excluded 34 securities from F&O trade. These included CG Power, IFCI, Jet Airways, PC Jeweller, Suzlon Energy and Wockhardt.

With the new exclusion, only 152 stocks would be available for trading in the F&O segment on the NSE, besides Nifty, Bank Nifty and Nifty IT indices.

The eligibility of a stock/index for trading in the derivatives segment is based on the criteria laid down by SEBI through various circulars issued from time to time. Based on SEBI guidelines and as a surveillance measure, the NSE had enhanced the eligibility criteria for selecting stocks and indices on which F&O contracts would be introduced.

Accordingly, the NSE last year said stocks in which average delivery volume was less than ₹10 crore in the last six months would not be included in the F&O segment. The NSE had also increased the stocks’ median quarter-sigma order size (the order size required for a stock price to change by one-fourth of its standard deviation) over the last six months to ₹25 lakh.

Only those stocks with market-wide position limit of over ₹500 crore on rolling basis are eligible.

Exclusion from F&O can lead to volatility in the stock and retail investors should stay away from positional trades in F&O as rolling over of a position into the future is not possible any more.

Published on July 22, 2019
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