The Hindu Business Line : Open interest up in refinery stocks

TRADING activity slipped sharply even though the Nifty scaled new heights at the derivative segment on the NSE last week; the average daily turnover was Rs 12,828 crore against the previous week figure of Rs 2,0515 crore that also saw the settlement of August month contracts.

Accumulation of open interest position was seen refineries counters such as Chennai Petroleum, Kochi Refineries and IOC. Pharma counters such as Dr. Reddy's Lab, Matrix Lab and Divi's Lab too added healthy open positions.

Fair value: The fair value of the Nifty September contracts (without considering dividend yields) works out to about 2425 against the Friday's close of 2408 (assuming interest rate at 6 per cent).

The FV of October contracts stood at 2437 (appx) against the Friday's close 2393.95. This indicates that farther month contracts are trading cheaper with respect to the near-month one.

FII position: The cumulative FII positions as percentage of total gross market position in the derivative segment declined to 34.04 per cent against the last week position of 39.06 per cent.

This indicates that to a certain extent apart from FIIs, others have also participated in the trading activity.

Stock futures: Reliance, SBI, Tata Steel, Reliance Capital, VSNL and SRF were the more actively contracts. Apart from them, contracts on Infosys, Satyam and TCS were also remained active.

Maruti also attracted smart activity after the Government announced its intention to offload an 8 per cent stake.

* Implied volatility of puts increased for index heavyweights while the same decreased for calls.

* Put/call ratio on volume-basis and open-positions wise increased for the index heavyweights, indicating the possibility weakness.

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