Despite an additional volatility margin of 5 per cent on Tuesday and another 20 per cent on Wednesday in the case of Mastek Ltd, the scrip has surged by 46 per cent during the week, thereby attracting a margin of Rs 125 per share or 40 per cent.

Sebi's bid to provide additional safety and act as a deterrent to building up of excessive positions has come a cropper. The aim was to contain volatility in securities while providing an exit route for investors. Although the intra-day volatility has been contained, the gains in the past week of over 25 per cent show that the bulls havealready built large positions coupled with high volumes. The software stocks have yet again shown exceptionally high volumes in the past week. The aim was to stop a one-way rise or fall in prices, but the lifting of the 25 per cent weekly price band has actually given the operators enough room to push prices to much higher levels. Under the previous regime, the scrip could not move beyond 25 per cent. But now the scrips have been allowed to swing to almost 47 per cent on a cumulative basis.

The bull recharge pushed up as many as 22 companies in group A and B1 beyond the 25 per cent weekly ceiling, which would not have been possible under the previous weekly price ceiling. The top gainer was Mastek Ltd, which zoomed by over 46 per cent in the past 5 trading sessions to Rs 314.80. In the past five trading sessions, the scrip has risen from Rs 215.6 last Friday to Rs 231.3 on Monday and Rs 250.8 on Tuesday, Rs 270.8, Rs 291.5 and Rs 314.8 on Wednesday, Thursday and Friday respectively. The scrip rose by 8 percent for three consecutive sessions and could have even risen by 47 per cent during the week but for the 7.7 per cent and 7.8 per cent rise on Monday and Friday, respectively.

HCL Infosystem shot up by around 42 per cent to Rs 180 from the previous week's closing of Rs 128. The top gainers were yet again the software scrips including Software Solutions, Pentafour Software, BFL Software, Silverline Industries and Satyam Computers. Among others, Global Telesystems, Dr Reddy's Laboratories, Corporation Bank and Bank of Baroda were the targets of bulls.

While announcing the additional volatility margins, Sebi felt that there was a need to curb excessive speculation through a graded margin system. Sebi had taken the view that ``weekly price bands coupled with different trading cycles across the exchanges and differential prices created situations in which, if a scrip reached the boundaries of a price band during a trading period, the investors did not have any exit route in that scrip for the remaining days ofthe trading cycle.'' But the move to impose the additional volatility margins seems to have hardly worked and the scrips, on different exchanges, still have a price differential, albeit this time they are moving in the other direction. Satyam Computers, for instance, on National and Bombay stock exchanges still have a price differential of almost Rs 8. Dr Reddy's Labs provides an arbitrage opportunity of Rs 4 between the two exchanges.