Why is Intraday trading not allowed on contracts in Ban period?

When a stock or security is in a "ban period," it means that trading restrictions have been placed on the security due to unusual or suspicious trading activity. These restrictions are put in place to protect investors and maintain fair and orderly markets. Intraday trading is often prohibited during these ban periods because it can exacerbate volatility and increase the risk of market manipulation. Essentially, it's a way to keep traders from exploiting market conditions or engaging in potentially fraudulent activity.

If a security's derivative contracts total more than 95% of the MWPL, that security is prohibited from F&O trading. This indicates that for that specific underlying, the total open interest of all F&O contracts for all months surpasses 95% of MWPL. Open interest is the total number of contracts that are currently active in futures and options trading on a recognized exchange.

A user is not allowed to create any new positions in securities during a ban period. He or she may, however, resign from positions that have already been filled.