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Market Intelligence › Basic Terminologies
How the Market Wide Position Limit works and what is allowed during a ban
Published by The Retail Trader · JUL 29, 2026 · Derivatives (F&O)
Sometimes taking a new F&O position in a stock is simply shut off. This is called the ban period, and it is triggered when the total open interest in that stock crosses a limit.
Every F&O stock has a market wide position limit, which is set according to that stock's free float. When open interest across the whole market reaches a large share of that limit, the stock goes into ban.
The ban is reviewed every evening. When open interest comes back down, the stock comes out of the ban.
A ban does not mean trading is shut, only that new exposure is shut:
• Creating a new position is not allowed — on neither the buy side nor the sell side.
• Closing an old position is allowed.
• The cash segment continues normally; the ban applies only to derivatives.
• Liquidity often gets thin during a ban, so exits can be expensive.
The ban list is published every evening and can be read in a minute. Checking it before you take a position saves you from the situation where you want to add a leg and the system will not even let you.
This article is for educational purposes only — it is not a buy or sell recommendation, makes no claim of guaranteed returns, and is not advisory. Rules, rates and mechanics are changed by the exchanges, SEBI and RBI from time to time, so verify every number yourself with your broker or the official source.