The Hindu Business Line : Heavy short positions in Nifty July future

Thanks to heavy short covering in June contracts, the Nifty recovered smartly. Trading turnover remained healthy at Rs 79,103 crore. The Nifty future ended the day at 4314.6 against the spot close of 4315.85. However, due to the creation of heavy short positions in Nifty July future, the discount is as big as 62.9 points, which is quite huge in recent times.

Nifty saw a rollover of 66 per cent, which is one of the lowest in the recent times. Among the July call options, 4400 and 4300 strikes were the most active with open interest standing at 22-lakh shares and 25.95-lakh shares. Among the puts, 4000, 4200 and 4100 strikes were the most active. The Nifty 4000 put has about 25.30-lakh shares in open interest. This indicates the possible broad range for the Nifty. The NSE Volatility index or India VIX declined on Thursday to 32.85 against Wednesday’s close of 36.46.

Stock future

Rollover was better in stock futures. Reliance Industries was the most active, followed by RPL, Reliance Capital, Tata Steel. Stock futures also saw heavy rollover and fresh creation of short positions. July contracts on Reliance Industries, RPL and Tata Steel remained in discount though Reliance Capital July future ended in premium with respect to June and spot price closes.

Reliance Industries witnessed hectic reverse arbitrage in today’s trade. Smart traders, who went short on Nifty June futures in the last few days and long on July as well in cash segment, reversed their position today, ending with handsome profits. With today being the settlement day for June series, it closed at 2,242 on part with the spot price close of 2,239.65. The July future, however, ended at 2,228 due to unwinding of long positions.

FII activity

Overseas investors remained net buyers in the F&O segment on Wednesday to the tune of Rs 918.57 crore. They were net buyers in index future (Rs 1,023 crore), stock futures (Rs 229 crore) though FII remained net sellers of Rs 368 crore in index options. However, in the cash segment, FIIs turned net sellers to the tune of Rs 667.19 crore, according to the provisional data provided by the NSE.

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