Can anyone from angel one team please let me know HOW mwpl is calculated for FNO contracts with a practical example on how can i calculate MWPL for a particular stock. Also, using the MWPL how stocks goes into Ban period in FNO using practical example using live scrip. @AngelOne Please help as i tried reaching out to Dhan as well on this but no reply was provided only general example was provided i need exactly using real data how mwpl for any stocks can be calculated in order to avoid fno ban before the scrip goes into FNO Ban
The Market-Wide Position Limit (MWPL) is calculated based on two key factors: Trading Volume and Free Float Holding. Here’s how it works:
- Trading Volume: This is the average number of shares traded daily over the preceding month in the cash segment.
- Free Float Holding: This is 20% of the shares held by non-promoters or the free float of the stock.
The MWPL is determined by taking the lower value between the Trading Volume and Free Float Holding.
Example Calculation of MWPL
- Assume:
- Average daily trading volume of a stock = 15,000 shares
- Total shares held by non-promoters = 100,000 shares
- Free Float Holding = 20% of 100,000 = 20,000 shares
- MWPL Calculation:
- Trading Volume = 15,000 shares
- Free Float Holding = 20,000 shares
- MWPL = Lower of Trading Volume and Free Float Holding = 15,000 shares
How Stocks Enter the F&O Ban
A stock enters an F&O ban when its open interest in futures or options contracts reaches 95% of the MWPL.
Practical Example
- Using the above MWPL:
- If the open interest for the stock reaches 14,250 shares (which is 95% of the MWPL of 15,000 shares), the stock will be placed under an F&O ban.
Monitoring MWPL
To avoid stocks going into an F&O ban, traders should regularly monitor the open interest levels in relation to the MWPL. If the open interest approaches 95% of the MWPL, it is advisable to adjust positions accordingly to avoid penalties associated with trading in banned stocks.
Understanding these calculations and monitoring them closely can help you manage your trading strategies effectively and avoid the F&O ban.
Hope this helps.
where can i get the details of Average daily trading volume of a stock in NSE and also where can i get the data of Total shares held by non-promoters