NSE to introduce dynamic price band for futures contracts

The National Stock Exchange Friday said it will introduce a dynamic price band for futures contracts in order to prevent erroneous order entries.

There are no fixed price band applicable for stock futures contracts.

"However, in order to prevent erroneous order entry, a dynamic price band for futures contract shall be kept at certain percentage of the base price as defined by the exchange from time to time," the bourse said in a circular.

The dynamic price band will be relaxed by 5 per cent in case of a market trend in either direction.

In a separate circular, the bourse said there would also be operating ranges for no price band securities.

"There is no price band in respect of securities, for which derivative products are available.

"However, in order to prevent members from entering orders at non-genuine prices in such securities based on pre-trade risk control guidelines, the exchange has set the dummy circuit (dynamic price bands) filter (operating range) at 10 per cent," it said.