In the financial markets today, there have been some interesting movements especially in the Nifty futures. Over the last four trading sessions, Nifty futures gained 1% while the open interest (OI) saw a slight dip of 0.4% in the August series and a significant increase of 47.2% in the September series.
Stock Market
Nifty Futures See a Rise
The premium in Nifty August futures has risen to 31 points as of Friday. What’s noteworthy is that trading volumes have been below average for the past five days. For example, on August 23, around 1.42 lakh contracts were traded, compared to the last 7-day average volume of 1.80 lakh contracts per day. Meanwhile, the September futures are currently at a 142-point premium to the spot Nifty.
Bank Nifty Futures Trading Activity
On the same day, the Bank Nifty August futures recorded a 1% increase. Interestingly, the OI dropped by 20% while experiencing a 12.5% rise in the September series. This indicates a shift in trader interest from the near-term to the more extended period.
FII, DII Trading Activities
Foreign Institutional Investors (FIIs)
According to data from the NSE, FIIs bought 748 contracts of index futures on August 23, which amounted to Rs 92.33 crore. Although they sold 5 contracts of Nifty futures, they bought 3,127 contracts of Bank Nifty futures and 345 contracts of MidCap Nifty futures. This led to the FIIs long-short ratio in index futures remaining unchanged at 1.1:1, showing that foreign investors hold more long positions compared to short positions. Currently, FIIs have 52.30% long positions in index futures. The data suggests that FIIs reduced positions in Nifty futures but added new ones in Bank Nifty and MidCap Nifty futures.
Domestic Institutional Investors (DIIs)
DIIs are currently holding nearly twice as many short positions in index futures as long positions, maintaining a long-short ratio of 0.55:1. Their net longs in index futures stand at 35.36%.
Retail Traders
Retail traders seem to have a steady long-short ratio of about 1.1:1. There was a slight increase in both long and short positions, with net long positions in index futures standing at 52.43%.
Stocks in F&O Ban Period
Today, 13 out of 181 stocks in the futures and options (F&O) segment are in the F&O ban period. These stocks include:
– Aarti Industries
– Aditya Birla Fashion Retail
– Balrampur Chini
– Birlasoft
– Chambal Fertilisers
– GNFC
– Granules India
– Hindustan Copper
– Indian Energy Exchange
– India Cements
– National Aluminium
– RBL Bank
– Sun TV
For traders, it’s essential to remember that they are not allowed to initiate new positions in stocks that are in the F&O ban period. Only exiting existing open positions is permitted. If new positions are initiated during the ban period, the exchange will levy a penalty on each trade. Once the open interest in a stock drops below 80% of the market-wide limit, it will be removed from the ban period.
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