Derivatives Daily Update: May 10 2012

Another Listless Day: May 10, 2012

Nifty May Futures closed mildly lower by 17.15 points at 4966.80. Bank Nifty closed lower by 25.05 points at 9354.80. Open Interest in Nifty across all the series was up by 2.80 lakh shares at 2.21 Cr shares. Turnover was lower than yesterday at Rs 1.10 trillion. Put Call Ratio across all the series for both Futures and Options was up at 1.06 indicating some Put writing happening in the market. Volatility as measured by India VIX was lower by 1% at 22.72. Dollar Rupee too was trading steady at 53.70. In all it was again a listless day with negative bias as far as price behavior is concerned.

In my opinion Nifty is attempting to break 4950. As such from last 6 trading session Nifty is making newer lows. If it succeeds in breaking this level and sustaining this break out for couple of days i.e. it closes below this level for couple of days than Bull Run which started from 4530 and ended at 5630 will be over and we might drift further lower. We are trading at crucial level so it is advisable to enter a trade with strict stop loss. To venture a short at crucial support is always a difficult proposition so wait for break out to happen and than enter a short with strict stop loss. It has been often seen that much talked about support or resistance level breaks as bear hammers vehemently at this levels and traders are trapped in to it. Therefore my advice is to watch for breakout and after confirmation of such break out one should venture a trade.

Top five individual stocks which gained today were HEXAWARE 5%, CANBK 5%, CHAMBLFERT 4%, CAIRN 4% and BALRAMCHIN 3%.

Top five individual stocks which lost ground were IVRCLINFRA -6%, GVKPIL -6%, SUZLON -5%, HDIL -5% and SKUMARSYNF -4%.

Top five individual stocks which attracted higher volumes were SBIN, ICICIBANK, AXISBANK, TATASTEEL and RELIANCE

Top five individual options which attracted higher activity today were SBIN 2000CE, SBIN 1950 CE, SBIN 1900 CE, SBIN 2100 CE and SBIN 1800 PE.

Nifty option series where POSITIVE change in open interest was seen were 4900 CE (1.83 LK) 5000 CE (6.82 LK) 5100 CE (9.18 LK) 5200 CE (3.63 LK) 5300 CE (1.41 LK) 5400 CE (5.40 LK) 4400 PE (1.17 LK) 4500 PE (2.23 LK) 4600 PE (8.41 LK) 4700 PE (5.53 LK) 4800 PE (3.33 LK0 4900 PE (6.60 LK) 5000 PE (22.47 LK)

Nifty option series where NEGATIVE change in open interest was seen were 5300 PE (1.26 LK)

Outstanding open interest in Out of the Money Call Options stood at 4.27 Cr shares and that of Put Options stood at 2.66 Cr shares. Outstanding open interest in In the Money Call Options stood at 29.28 LK shares and that of Put Options stood at 1.72 Cr shares. Put Call Ratio of current series alone stands at 0.95.

Happy Trading

Atul Doshi