NSE removes 50 stocks from F&O

The National Stock Exchange (NSE) has excluded 50 stocks including 3i Infotech, Balaji Telefilms, Ballarpur Industries, Edelweiss Capital, Escorts, Jet Airways and UTV Software Communications from the futures and options (F&O) segment, after the Securities and Exchange Board of India (Sebi) tweaked the rules for the derivatives segment.
The exclusion of 50 stocks triggered a sell off with 47 out of these companies ending in negative territory on Wednesday.
The 50 stocks will not be available for trading on expiry of the existing contracts ending April, May and June. This means, there will not be fresh contracts on these stocks from July. There are 234 stocks in F&O, which will stand reduced to 184 following the exclusion.
In a separate circular, NSE said it is revising the eligibility criteria for inclusion of stocks in F&O segment as required by Sebi.
As per the new rules, the stock for F&O will be chosen from among the top 500 stocks in terms of average daily market capitalisation and average daily traded value in the previous six months on a rolling basis. The stock’s median quarter sigma order size (the average of the median buying and selling price) over the past six months should not be less than Rs 500,000. It was Rs 100,000 earlier.
NSE also doubled the market wide position limit in the stock to Rs 100 crore for inclusion into F&O.