Have you been curious to get the information on the F&O ban? Do you want to know its meaning? If yes, read the article to learn more. It has come from the sources or reports that the entry of the future and options(F&O) bans heavily affect the stocks. Under many conditions, your broker informs you that there are no positions available after the F&O Ban. 

What is future trading?

A futures trading is a contract between the buyer or seller, and this contract is made for the future up to the age of the expiration date. Two participants exist in the future trading, one is a hedger that protects their assets from risk, and the other is a speculator that acts as the floor trader for speculative trading. In futures trading, the buyer has to pay the charges of small margin value when beginning the future contract. Under future trading, the derivatives work as the futures contracts that derive their values from the financial price movement. Future trading is used for hedging communities to avoid the risk of price fluctuations or take benefits from price movements. 

What is the f&O ban on working?

Trading in the F& O takes place in the derivate market. Under some conditions, when the stock exchange feels a heavy loss or may danger with their trades, they ban the F& O at the particular stock. The ban only exists on the particular stock, not the entire derivates market. When a particular stock is listed in the F&O ban, the traders cannot open their new positions in the derivates market. The traders can only open a new position in the derivate market when the F&O is not banned. 

The main aim of putting the particular stock under the F&O ban list is to deal with the excessive losses in the stock. The only trading that the stock exchanges allow in a particular stock in the derivate market is that traders may leave their position or get coverage from their positions. These are the two aspects of the working of the F&O ban list. Sometimes, if the traders try to open a particular stock listed under the F&O ban, they have to pay an amount with a high penalty. Also, there are chances to sell their shares forcefully for giving the penalty on opening the particular stock. 


This article tells you about the future trading and F&O banned list. We also informed you about the penalty brought to the traders who tried to open the particular stock listed under the F&O ban. There are many technical and fundamental stock analyses to understand these worrying trends. These are the things that we need to pay a lot of attention to trading in F&O. The act to open the particular stock from the F&O ban impacts traders and their stock price. 

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