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Tuesday, May 18, 2004

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`Worst day' for derivatives trading

Our Bureau

Kolkata , May 17

THE derivatives segment of the domestic stock market on Monday gave a mirror image of devastation caused by the earthquake that shook the cash segment.

In the individual stock futures, delay in getting strike price compounded trading problem. For example, when the Gail stock touched the day's low of around Rs 107 in the cash segment, the NSE derivatives strike price was at Rs 190.

The total outstanding position underwent a sharp decline. In terms of volumes, the overall reduction in outstanding position was recorded at 10 per cent, but in terms of value it was down by 18.84 per cent.

"This is because the prices kept on falling," said Mr V.K. Sharma, Chief Analyst of Anagram Stockbroking. The Nifty futures traded at a discount of 53 points to the spot at close of the session.

The put-call ratio also reflected a panic reaction. Puts, in terms of volume, was down by 6 per cent and the call by 0.6 per cent.

In the history of the derivatives trading, in the domestic market, it was the worst day in the near month contracts, according to analysts.

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