The Hindu Business Line : Listless trading in F&O

The listless session was reflected in the trading volume, as only Rs 6,318 crore worth transactions took place at the F&O segment on the NSE on Wednesday against Tuesday's figure of Rs 6,458 crore.

Index futures: After moving in a tight range, the Nifty spot closed the day marginally lower at 1548.30. Mimicking the spot index movements, the Nifty June futures also closed weak at 1529, still a discount of over 19 points to the spot.

Open interest positions also slipped to 54,905 contracts from 55,421 contracts.

The Nifty July contracts closed at 1514.75, a discount of 33.75 points and open interest slipped by over three per cent to 1,100 contracts.

The fall in trading volumes and open interest positions indicates that the demand of contract holders wishing to exit their existing positions exceeds the supply of willing participants wishing to enter into the offsetting position.

Put/call ratio (PCR), which has been rising of late, improved to 0.84 open interest positions-wise and to .97 by volume-wise.

Implied volatility of puts is higher than that of calls.

Fall in volume, higher PCR and huge backwardation point towards bearish outlook for the Nifty. Traders are advised to trade cautiously with strict stop-loss positions.

Stock futures: Maruti was the most active contracts. Apart from Maruti, contracts on Reliance, SBI, Tata Power, Satyam Computer, Tata Motors and Tata Steel also were also in focus.

The backwardation was quite prevalent in auto counters such as Maruti, Tata Motors and Mahindra & Mahindra. However, contracts (June) on Reliance, SBI, Tata Steel and Tata Power trade around spot levels.

Reliance Energy, which announced its buyback proposal on Wednesday, however, trades with a huge discount of Rs 22.95.

The REL June futures closed the day at Rs 517.95 against the spot close of Rs 540.50. Open interest positions also dropped marginally for REL.

Many other contracts also saw erosion in open interest positions.

Options: The Nifty 1500-strike was the most active among Nifty options. The Nifty 1500 puts clocked higher volumes at 1,935 contracts against the Nifty 1500 calls' volume of 1,310 contracts.

FIIs: Foreign institutional investors were net buyers in the derivatives segment to the tune of Rs 148 crore on Tuesday, as they covered their short positions in the Nifty and stocks futures.