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Questions and Answers

What action does the Exchange take when the aggregate open interest exceeds 95% of the market wide position limit for a scrip?

Resumes normal trading in the scrip

Imposes a trading halt in the scrip

Takes note of open positions of all clients/TMs and allows them to trade only to decrease their positions (correct)

Takes note of open positions of all clients/TMs and allows them to increase their positions

What is the primary objective of the Securities Contracts (Regulation) Act, 1956?

To govern the trading of securities in international markets

To prevent undesirable transactions in securities (correct)

To promote undesirable transactions in securities

To regulate the stock exchanges in India

What is the criterion for resuming normal trading in a scrip?

When the open interest is zero

When the aggregate open interest comes down to 80% or below of the market wide position limit (correct)

When the aggregate open interest exceeds 100% of the market wide position limit

When the aggregate open interest comes down to 90% of the market wide position limit

What is disseminated by the Exchange at the end of each day?

Aggregate open interest across all Exchanges in the futures and options on individual scrips Signup and view all the answers

What is defined in Section 2(h) of the SCRA?

The term 'securities' Signup and view all the answers

What happens when the Exchange finds that the aggregate open interest exceeds 95% of the market wide position limit for a scrip?

The Exchange takes note of open positions of all clients/TMs Signup and view all the answers

What is the market wide position limit related to?

A scrip Signup and view all the answers

What is the purpose of the Exchange disseminating the aggregate open interest?

To test whether the aggregate open interest exceeds 95% of the market wide position limit Signup and view all the answers

What is governed by the Securities Contracts (Regulation) Act, 1956?

Trading of securities in India Signup and view all the answers

What is the consequence of the aggregate open interest exceeding 95% of the market wide position limit?

The Exchange takes note of open positions of all clients/TMs and they can trade only to decrease their positions Signup and view all the answers