Why do Futures & Option scrips enter ban period, what does it mean?

The exchanges set a MWPL (Market-wide position limits) for all stocks traded in the F&O segment. The F&O contracts enter the ban period when the open interest (the maximum number of contracts that can be open) of a particular stock exceeds 95% of the MWPL (All futures and options contracts of that stock), all F&O contracts of that stock enter a ban period. This is done to prevent excessive speculation and volatility in the market. It is a measure of risk management.

When the stock F&O contracts are in the ban period, no new positions in the stock's futures and options contracts are permitted. During this time, you will only be able to exit existing positions. The ban is only lifted if the open interest falls below 80%.

Alternatively, you can trade the stock in the cash segment where no such limits apply. Click here to know about MWPL.