1492 terms

Glossary

Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.

Showing 2 terms

Market wide position limit

Derivatives

Also called: MWPL

A cap set by the exchange on the aggregate derivatives open interest permitted in a single stock, expressed as a number of shares.

In plain terms

It stops the derivatives tail growing large enough to wag the cash market. The basis on which it is computed has been revised, so read the current circular for the formula — what has not changed is that the names reaching the ceiling are overwhelmingly midcaps with concentrated promoter holdings and thin deliverable float.

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Ban period

Derivatives

Also called: F&O ban

The state a stock enters when derivatives open interest crosses 95% of its market wide position limit, during which only position-reducing trades are permitted.

In plain terms

The 8:40 local at Dadar with the guard on the door — people can still get off, nobody can board. It lifts only below 80% utilisation, so a rally on falling open interest in a banned name is shorts leaving, not the market forming a view.

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