F&O Insights: Grasim among 12 stocks with over 20% OI change in last 4 days

In the derivatives segment, stocks such as India Cement, GMR Infra, Chambal Fertilizers seem to have witnessed long unwinding in recent trading sessions owing to the sharp rally in share prices.

In the last four trading sessions, 12 out of the 183 futures & options stocks have seen over 20 per cent change in open interest (OI), meaning outstanding open positions. A total of 43 stocks have seen over 10 per cent rise or fall in OI during the same period.

A substantial change in OI helps in understanding the trading sentiment at the particular counter. A rise in the share price with a corresponding rise in OI suggests buildup of long positions, while a decline in the stock future price alongside a rise in OI, indicates likely buildup of short positions.

 

These apart, there are two other scenarios, wherein the OI and price-based action helps in identifying possible short-covering or long unwinding trading activity. In general, a rise in underlying price with decrease in OI tends to indicate short-covering, while a fall in share price coupled with decline in OI could mean long unwinding. However, the price action prior to such trading activity holds the key.

Meaning, only in case, where the stock has fallen or consolidated in recent times and then we see a sharp spike - the rally is attributed to short-covering. On the other hand, long unwinding is seen when prices fall after a steep rally.

Here the 12 stocks across sectors with significant trading activity in the last four days in the June derivatives. 

First, let's look at stocks with rise in OI:

Grasim

Likely activity: Not clear

Grasim June stock futures have seen a huge 62.2 per cent rise in OI in the last four days, while the stock price has gained only 1.5 per cent.

Coromandel International

Likely activity: Long buildup

The stock has rallied 11.3 per cent backed by OI has risen by 43.7 per cent.

Can Fin Homes

Likely activity: Long buildup

The stock has gained 5.6 per cent, despite the volatility in the last two trading sessions, while the OI has risen by 27 per cent.

Alkem

Likely activity: Not clear

Alkem stock price has exhibited a choppy trend, while the OI has increased by 24.7 per cent.

Metropolis Healthcare

Likely activity: Short buildup

The OI has jumped by 23.5 per cent at the counter, while the stock has declined 2.3 per cent.

Muthoot Finance

Likely activity: Short buildup

Muthoot Finance stock has slipped nearly 3 per cent in the last few days, while the OI has increased by 23 per cent.

Now, let's look at stocks with over 20 per cent fall in OI

India Cements

Likely activity: Long unwinding

India Cements stock has rallied 6.5 per cent in the last four days; whereas the OI has decreased by 27.2 per cent.

Jindal Steel

Likely activity: Not clear

The stock is up 1.4 per cent, while the OI has declined by 23.8 per cent. 

Mahanagar Gas (MGL)

Likely activity: Long unwinding

MGL stock has gained 2.6 per cent, while the OI has dipped by 23.4 per cent.

Chambal Fertilizers

Likely activity: Long unwinding

The stock has zoomed 27.7 per cent, while the OI has reduced by 22.3 per cent.

GMR Infra

Likely activity: Long unwinding

The stock rose 5.7 per cent, while the OI dropped over 22 per cent.

Hindustan Aeronautics (HAL)

Likely activity: Long unwinding

The stock was up 3.4 per cent, while the OI declined by 20.7 per cent. The stock had also briefly entered the F&O ban period in recent days.