MWPL, or market wide position limit, is the maximum open interest the exchanges allow in the futures and options of a single stock. When combined open interest crosses 95% of that limit, the stock enters the F&O ban period. Traders can only reduce positions in it until open interest falls below 80%. Index contracts such as Nifty and Bank Nifty have no MWPL and never go into ban.
MWPL stands for market wide position limit. It is a cap set by the exchanges under SEBI rules on how much derivatives exposure can be open in one stock at a time. It stops F&O positions growing far larger than the shares actually available to trade, which is what causes short squeezes and settlement failures.
How MWPL is set
Since 1 October 2025, MWPL for each stock is the lower of 15% of its free float market value or 65 times its average daily delivery value in the cash market, with a floor of 10% of free float. The exchanges recalculate it every quarter using the previous three months of cash market data. The limit is expressed in shares, and both NSE and BSE positions count toward the same number.
How open interest is measured against it
Open interest is no longer a plain count of contracts. It is measured on a futures equivalent basis, so each option position is adjusted by its delta first. A deep out-of-the-money option adds very little, while a futures contract counts in full. Exchanges check utilisation at least four random times a day as well as at the close.
What the ban period means
When combined open interest reaches 95% of MWPL, the stock goes into the ban period from the next session. Fresh positions are not allowed. Any trade in that stock must bring your own open interest down by the end of the day. The ban lifts only when total open interest drops below 80% of MWPL. Brokers and clients who add to positions during a ban face a penalty from the exchange.
A worked example
Suppose a mid-cap stock has an MWPL of 2 crore shares. At Tuesday's close, open interest across its futures and options adds up to 1.92 crore shares, or 96% of the limit. From Wednesday the stock is in ban. A trader holding ten lots of futures can square off but cannot buy more. If open interest falls to 1.55 crore by Thursday's close, or 77.5%, the ban ends and fresh trades are allowed from Friday.
Why it matters to a SAHI trader
The exchanges publish the ban list after the close. Check it before placing a fresh futures or options order in a single stock, because an order that adds to a position in a banned stock is rejected. Stocks near 90% utilisation are the ones to watch, since one heavy session can tip them in.
FAQs
Can Nifty or Bank Nifty go into F&O ban?
No. MWPL applies only to single stock derivatives. Index futures and options have their own position limits but no ban mechanism.
Can I exit a position during the ban period?
Yes. Closing or reducing trades are always allowed. Only trades that add to open interest are blocked.
Where is the F&O ban list published?
NSE and BSE publish the next day's list on their websites after market hours.
Why do stocks in ban often become more volatile?
Traders switch to the cash market and short sellers cannot hedge with fresh futures, so prices can move sharply.