Why is a security banned from trading?
A security is banned from trading when its open interest exceeds 95% of the Market Wide Position Limit (MWPL). This restriction is imposed to control excessive speculation and maintain market stability.
Key Points to Consider:
New positions cannot be opened until the security’s open interest falls below the MWPL threshold.
Only squaring off (closing existing positions) is allowed during the ban period.
The ban is lifted once the total open interest drops below 80% of MWPL.
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