Volumes in the F&O segment have dipped in the last two trading session amid high volatility in the cash market.
Against the normal turnover in the F&O segment of around Rs 70,000 crore to Rs 80,000 crore a week ago, the turnover in NSE’s derivatives segment stood at Rs 36,073 crore on Wednesday, compared to Rs 44,307.58 crore on Tuesday.
The Nifty January futures, after witnessing high volatility, gyrated in the range of 407 points before settling at 5,164 points, a rise of 269.40 points from its previous close and at a discount of 39 points from its spot price. The open interest reduced by around 2% at 30.37 million.
Sidarth Bhamre, derivatives analyst at Angel broking said, ?We saw a continuation of short covering at lower levels and also some fresh positions were taken it the heavyweight stocks.
Investors preferred the cash market and they were really apprehensive of investing in the derivatives segment mainly due to the margin calls issue. NSE also increased margin limits for some stocks, so even the institutional investors stayed away from it.?
According to market sources, the National Stock Exchange (NSE) has hiked margins for 44 stocks in the derivatives segment by 50% and by 100% for five stocks which led to very less participation from the retail segment.
Five stock futures whose margins were increased by 100% were Sasken, IVR, Prime, NIIT Tech, Polaris. And these are the counters that are expected to lower exposure in these stocks.
Also dealers asking for margins upfront before taking any fresh positions, kept the retail investors on the back foot on Wednesday. “This was one of the reson for drastic fall in the turnover on the derivaties segment,” dealers said.
Markets expert believe that under such uncertain markets scenario further unwinding of leveraged position can be seen and this could make the derivatives market further volatile.
Viral Doshi, an individual derivatives and technical strategist said, ?High uncertainty in the global markets will definitely have some short to medium term uncertainty in the derivatives markets in India.
The volatility is going to continue till the time the overseas markets stabilises. However, in the long term I see a healthy picture for the Indian markets and a normal rate of rollovers next week?.
The Nifty mini future for January month was trading at a discount of 43.3 points as compared to its spot price.
