Starting 8 December 2025, there’s a change in how exposure (Open Interest) will be calculated for F&O stocks that enter the Ban Period.
What’s new?
- Earlier, exposure was measured only by counting contracts at the end of day.
- Now, exposure will be calculated more accurately using Future Equivalent Open Interest (FutEq OI)
- This considers both Futures and Options together using delta
- Compliance checks will now happen multiple times during the day, not just at the close
What it means for you:
If a stock goes into a Ban Period:
- No new positions or rollovers allowed
- You can square off existing positions
- If only one side of a hedge is squared off which results in an increase in FutEqOI, your pending orders may be cancelled, and positions may be auto-squared off after 2 PM (as per risk policy).
What penalties might you face:
Any increase in exposure beyond permitted levels in the Ban Period may attract penalties, recoverable from the client.
Example:
Let’s say you have positions in a stock that suddenly enters the Ban Period.
Your positions:
- 2 lots Buy: Futures (January expiry)
- 2 lots Buy: Call Options (January expiry)
- 2 lots Sell: Futures (February expiry)
On the next day (T+1), the stock enters the Ban Period.
What happens now?
- You cannot take any new trades in this stock
- You can square off (close) your existing positions
- But if you close only one part (for example, you square off January Futures but keep February Futures open), your exposure may increase
If exposure increases:
- Your pending orders in that stock may be cancelled after 2 PM.
- Positions may be auto square off as per risk rules.
- You may also face penalties, which can be recovered from you.
Why does this matter?
Since exposure is calculated on a delta-based basis, any change in one part of a hedge may affect your overall exposure.
Note: This example is only to help you understand how the new rule works.
For more details, please refer to the circular here.