|
1-m
futures price |
| MRPL | 174.10 | 0.08 |
| Bongaigaon Refinery | 166.56 | 0.01 |
| GE Shipping | 150.79 | 0.22 |
| IOC | 100.00 | 0.06 |
| BPCL | 69.76 | 0.11 |
| ICICI Bank | 54.35 | 0.02 |
| Orchid Chemicals | 34.67 | 0.02 |
| BHEL | 30.56 | 0.47 |
| CESC | 30.28 | 0.16 |
| Ashok Leyland | 27.66 | 0.10 |
There are also two apparent group plays. Birla scrips such as Century, Grasim, Indian Rayon and Hindalco are moving up on news of the Pilani settlement.
| |
| These appear to be worth buying. There is also the enigma of the Reliance group scrips. The details of the settlement have puzzled the market if we go by the indeterminate movements since the plan was announced.
|
| |
The F&O listed majors such as RIL, REL, Rel Caps and IPCL will move away from the current price in some direction once the market pronounces its verdict. This is likely to happen this week.
| Stocks with highest change in Futures OI | | Cos | % chng | 1-m
futures price | | Divis Labs | 81.43 | 1255.5 | | MRPL | 79.72 | 54.85 | | GE Shipping | 75.11 | 173.05 | | Ashok Leyland | 74.97 | 29.75 | | GAIL | 56.86 | 243.95 | | RIL | 47.19 | 732.4 | | Chennai Petro | 46.68 | 202.55 | | Sterlite Industries | 45.76 | 738.45 | | PCS | 45.38 | 382.1 | | Tata Power | 42.61 | 432.6 |
|
| |
| An F&O trader could try to exploit this situation by creating two-way positions. One method is a strangle-long puts and long calls sandwiching the current price.
|
| |
| Another method is a long put (bear-spread)-long future or long call (bull-spread)-short future. All three positions would pay off if the prices move away from current spot.
|
| |
| Right now, the August futures are at premiums to cash so that focuses attention on positions involving short futures. On examination, the best positions appear to be available in RIL and IPCL. In RIL, with spot at 725, August is at 732.
|
| |
| If we take a short future because of the premium, we profit on a possible downwards movement. We can exploit a possible upside with a bull-spread of long 740c (21.5) and short 760c (14.25) and a total payout of 7 with potential maximum gains of 13 if RIL moves up. In REL, cash is at 647, August is at 653.
|
| |
| A short future coupled to a bull-spread of long 660c (19.5) and short 680c (10) with a cost of 9.5 versus a potential gain of 10.5 is possible. In IPCL, cash is 194, August is 196. We can take a short future, and create a bull-spread of long 195c (8.55) versus short 205c (5.05) for an outlay of 3.5 and a potential gain of 6.5.
|
| |
| In Rel Caps, cash is at 476, August is at 478. A short future can be coupled to a bull-spread of long 480c (19.95) versus short 490c (15.05), which costs about 5 and pays a maximum of 5. |
| |
