Check FIIs, DIIs, retail positions in F&O post Nifty biggest weekly fall

Derivatives market update for Oct 07: FIIs long-short ratio in index futures further falls to 1.4, down 300 bps in last 4 trading sessions; retail investors turn bullish after more than a month.

Futures & Options (F&O) Insights for Monday, October 07, 2024: Last week, the Indian equity market crashed sharply amid rising Israel-Iran conflicts and stimulus measures by the Chinese government to revive its sagging economy.

The twin blows, saw the National Stock Exchange (NSE) Nifty 50 index log its biggest weekly loss in more than 2 years - down 4.3 per cent for the week at 25,015. The Nifty had hit a new all-time high at 26,277 on September 27. Similarly, the 30-share BSE (Bombay Stock Exchange) Sensex too ended 4.5 per cent lower at 81,688. The Sensex had hit a high of 85,978.

 

Technical Analyst, Om Mehra of SAMCO Securities believes that the momentum has shifted to the downside, implying that any potential relief rally might be adhered to with selling pressure. The immediate support for Nifty remains at 24,800, he added.

The Nifty October futures OI (open interest) rose by 3.4 per cent on Friday even as the Nifty plunged more than a per cent. Similarly, Bank Nifty OI jumped by 6.5 per cent. The Nifty futures contract witnessed a 66-point dip in premium when compared with the spot Nifty, while Bank Nifty October futures premium declined to 409 points from 540 points the day before.

FII, DII trading activity in F&O - Here's all you need to know about who bought and who sold in the derivatives market on Friday, October 04:

Foreign institutional investors (FIIs) were aggressive net sellers for the second straight day on Friday. As per data available from the NSE, FIIs net sold 79,868 contracts of index futures a day after net sales of 1,55,282 contracts. FIIs net sold 62,866 contracts of Nifty futures worth Rs 3,976 crore; 15,328 contracts of Bank Nifty futures worth Rs 1,200.73 crore and 669 contracts of MidCap Nifty futures.

Amid the net sales in Nifty futures, FIIs open interest (OI) in Nifty futures rose by 3.8 per cent; thus indicating a combination of long unwinding and fresh short build-up in the Nifty contracts. Similarly, the OI in Bank Nifty rose by another 20 per cent - suggesting addition of short positions in the banking contract. 

Pursuant to which, FIIs long-short ratio in index futures dropped to 1.4:1 as against a high of 4.4:1 at the end of trade on September 27. The ratio now implies that FIIs hold more than one bet on the long side in index futures for every short position.

On the other hand, domestic institutional investors (DIIs) added fresh bets on the short side as the long-short ratio dipped from 0.6 to 0.56 in index futures. 

Meanwhile, retail investors turned net bullish for the first time since August 27. The long-short ratio jumped to 1.1:1 - implying more than one long position in index futures for every short trade.

Proprietary traders also trimmed their short positions considerably as the ratio increased from 0.54 to 0.68. This ratio implies that proprietary traders hold 3 long positions in index futures for every 2 short bets.

Key Insights from Nifty, Bank Nifty options data

The Nifty PCR (Put Call Ratio) for the series expiring October 10 stands at 0.44; which is a fairly bearish indicator. There is aggressive Call Writing at 26,000 and above Strike Prices. Active trading was also seen at 26,200 - 26,800 Strikes. Max Call writing was visible at 26,400 Call, suggesting likely resistance at 25,350 levels for the Nifty 50 index.

On the other hand, notable build-up of OI was seen at 24,000 and 23,500 Puts. Some Put writing was seen at 24,800 Strike, indicating possibility of support for the index around 24,750 levels.

Bearish sentiment also dominates the Bank Nifty options market, with call writing exceeding put writing in near 2:1 ratio. The 52,500 and 53,000 Calls hold significant OI with notable Call writing. On the other hand, some Put writing was visible at 50,500 Strike. 

Bullish & Bearish stocks

Among individual F&O stocks, Apollo Tyres, Godrej Properties and M&M Finance seem to have witnessed fresh addition of positions on the short side of trade. Whereas, some buying was visible at the Tata Chemicals counter.

Stocks in F&O ban period on Monday, October 07

These are the 7 stocks placed under futures & options ban period on Monday - Bandhan Bank, Birlasoft, GNFC, Granules India, Hindustan Copper, Manappuram Finance and RBL Bank.