What is Market Wide Position Limit (MWPL)?
Market wide position limits, applicable only for stocks (all option and futures position) and not on index derivatives, is expressed in terms of number of shares. It is the lower of:
- 30 times average number of shares traded daily, during the previous calendar month, in the cash segment of the exchange, or
- 20% of the number of shares held by non-promoters i.e. 20% of the free float, in terms of number of shares of a company.
Stock Exchanges release the MWPL for each of the stocks traded in the derivatives segment on a monthly basis.