NSE, BSE exclude 4 firms from F&O trading

Both the stock exchanges -- NSE and BSE -- have decided to exclude four companies from futures and options trading from January 31 next year.

The companies that have been excluded include: Dish TV India Limited, NBCC (India) Limited, Tata Motors Limited -DVR, Castrol India Limited.

The exchanges took this call-in line with regulator SEBI circular dated April 11, 2018, regarding stock selection/exclusion criteria.

The eligibility criteria, according to the regulator is that the company amongst the top 500 stocks in terms of average daily market capitalisation, and that the average daily delivery value in the cash market shall not be less than Rs 10 crore in the previous six months on a rolling basis, among others.

The move is expected to protect market participants from huge single-day swings.

"It may be also noted that the existing unexpired contracts of expiry months November 2019, December 2019 and January 2020 shall be available for trading till their respective expiry and new strikes shall also be introduced in the existing contract months. Members are requested to note that there shall be no contracts available for trading in the above-mentioned security with effect from January 31, 2020," BSE said in a circular.

Derivatives markets or F&O segment reflects the expectation of spot prices in the future, and current price bands or circuit filters are generally not applied to them.

At present, there are over 200 stocks in F&O segment.