Massive unwinding seen in stock futures2008-01-21 18:05:54 Source : CNBC-TV18

By Anichya Shah,

CNBC-TV18:

It was a day of massive unwinding seen in stock futures. Rs 12 crore was the net open interest shed in the stock futures. Rs 14 crore were shed in the January series as well and on account of the Rs 2 crore open interest addition in the February and in the March series, we did see that amount come down to about Rs 12 crore.

But if you look at the turn over, it was at about Rs 65,000 crore, not too large, considering the amount of sell off we have seen and this is primarily on account of constant unwinding from the beginning of the day. Low amount of volatility, just sell orders, just unwinding their profits, paying the margins and we have seen unwinding throughout the day. That number kept on increasing throughout the day. There were about 58 stocks in the F & O which were down over 20%, about a 150 stocks that were down over 10 percent, so on a leverage basis, you are losing 5 times of that amount, which shows you the extent of pain the traders have felt today.

Now back to the Nifty, 43% of the trading volumes came from the Nifty today, we saw a move between a slight premium and a discount through out the day. We did see shorts created in the Nifty throughout the day, most of the intra-day trading happened in the Nifty and some segment of short covering came in the day end as there were only about 38 lakh shares changed in open interest and at the peak, we had seen about 45 lakh shares changed in open interest.

Essar Oil was the biggest loser of the day. The power space, by NTPC saw most amount of unwinding; we saw 94 lakh shares being shed. Two other momentum boys, RNRL and ISPAT saw fair bit of unwinding in today’s trade, about 91 lakh shares shed there, so that’s a fair bit of a discount and ISPAT with 74 lakh shares shed, that stock is in a discount as well.


The entire sugar and fertilizers space, which has been one of the biggest losers of the last week. So a fair bit of unwinding and we did see some sembleance of open addition at lower levels, the stock was down 15% towards the end of the day.

So a very painful day both for the mid-cap and the large cap space and a whole lot of selling pressure seen in the F & O space

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