Nifty futures edged up 0.1 per cent on Monday to 24,596. The premium of August futures over the spot Nifty narrowed to Rs 22.8 from Rs 44.50 amid lower trading activity. A mere 1.52 lakh contracts were traded yesterday as against 3.8 lakh contracts traded in Friday’s trading session. Open interest (OI) declined nearly 3 per cent, suggesting possible exits of short positions from the system.
Meanwhile, Bank Nifty futures fell 0.3 percent along with a 2.8 percent rise in OI on Monday.
FII, DII Trading Activity: Here’s everything you need to know about who bought and who sold.
According to NSE data, foreign investors marginally reduced their long positions in index futures. On August 19, foreign investors sold 4,609 index futures contracts worth Rs 303.95 crore. Foreign investors were net sellers of 3,671 Nifty futures contracts and 1,497 Bank Nifty futures contracts.
According to the above, the ratio of foreign investors’ long and short positions in index futures remains at 1:1, implying that foreign investors now hold one long position in index futures for every bet on the short side of the trade. Foreign investors’ long positions in index futures stood at 49.97 percent.
Meanwhile, domestic institutional investors (DIIs) continue to hold two short positions for every one open position on the long side of index futures. The ratio of DIIs’ long to short positions in index futures stands at 0.53:1; with net long positions at 34.59 percent.
Retail traders slightly increased their long positions in index futures yesterday. The ratio of long to short index positions rose to 1.22:1 from 1.18:1 the previous day. On a net basis, retail traders purchased 12,491 index futures contracts on August 19.
Nifty and Bank Nifty Options Outlook
Nifty options are reflecting a sideways sentiment, with almost equal writing of call and put options. A sustained move above 24,650 is needed for the bulls to take control, otherwise the index may continue to witness a sideways momentum, said Dhupesh Dhameja, technical analyst at SAMCO Securities in a note.
Significant open interest is seen in 25,000 call (91.82 lakh contracts) and 24,000 put (59.03 lakh contracts) options, with notable activity around 24,500 put and 24,600 call options. The put-call ratio (PCR) declined marginally to 0.99 from 1.18 on Friday, but the positive outlook remains as the PCR remains close to 1, indicating positive sentiment on the Nifty, the note said.
In case of Bank Nifty, notable open interest is seen in 50,000 call (29.15 lakh contracts) and 50,000 put (21.77 lakh contracts) options, with significant activity around 50,600 call and 50,300-50,200 put options. The put-call ratio (PCR) has declined to 0.76 from 1.04 on Friday, indicating a slight bearish sentiment as the index is trading below its 20-day exponential moving average.
Bullish and Bearish Stocks: Here is a list of stocks that experienced a build-up of long and short positions in trading on August 19
What is long and short accumulation?
Generally, an increase in the stock price along with an increase in open positions is considered an accumulation of long positions. On the other hand, a fall in the stock price along with an increase in OI is considered an accumulation of short positions.
On Monday, JK Cement, Glenmark Pharma, Metropolis Healthcare and National Aluminium (NALCO) saw long positions build up, signifying bullish bets.
While InterGlobe Aviation (IndiGo), IndusInd Bank, Motilal Oswal Financial Services and Mahindra & Mahindra saw short positions build up in the August series.
Stocks in F&O ban period
Of the 181 stocks in the futures and options segment, 19 are in the F&O ban period.
Aarti Industries, Aditya Birla Fashion Retail, Balrampur Chini, Bandhan Bank, Birlasoft, Chambal Fertilisers, GNFC, Granules India, Hindustan Copper, India Cement, IndiaMart Intermesh, LIC Housing Finance, Manappuram Finance, NMDC, Piramal Enterprises, PNB, RBL Bank, SAIL and Sun Tv are the 19 stocks under F&O ban today.
Traders are not allowed to open new positions in stocks that are under the F&O ban. Traders are only allowed to exit existing open positions. In case a new position is opened during the ban period, the exchange applies a penalty to each such trade.
When open interest in the stock falls below 80 percent of the market cap, the stock exits the blackout period.
First published: August 20, 2024 | 11:18 am IS
Disclaimer
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.