Financial Daily from THE HINDU group of publications
Sunday, Sep 08, 2002
Financial Daily from THE HINDU group of publications Sunday, Sep 08, 2002 |
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Investment World
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Derivatives Markets Markets - Derivatives Markets BPCL in limelight Sanjiv Shankaran
APPREHENSION about political turmoil in West Asia and growing opposition within the Government to privatisation of state-owned enterprises led to equities losing ground towards the end of the week. The BSE Sensitive Index closed at 3,141.11 points, shedding about 1.25 per cent in value in relation to the previous week's closing value. The weak trend in equities was a development on the cards following a moderate rally in the latter half of August. Elements of uncertainty that cast a shadow over the equity market are unlikely to allow an uptrend to bloom into a significant rally. Getting down to individual stocks, the growing queasiness about privatisation within the Government brought Bharat Petroleum into the limelight because the company's disinvestments program is eagerly awaited. The company's share price may see a relatively high level of volatility in the next few weeks, thereby opening the door to big opportunities in the derivatives market. Options: The weak trend towards the end of the week in the spot market sent some of the most actively traded call option contracts out-of-the-money. Satyam Computers' September contract at a strike price of 240 was the most actively traded call option contract last week. The contract ended the week out-of-the-money. During the course of the week the trading volume in Satyam 240 was 4,882 contracts. Reliance's September call option contract at a strike price of 260 ended the week in-the-money. Reliance 260 notched a volume of 2,264 contracts last week. Bharat Petroleum's September contract at a strike price of 280 attracted a fair bit of trading interest. The contract ended the week out-of-the money. During the course of the preceding week, Bharat Petroleum's 280 registered a volume of 1,658 contracts. Among put option contracts, a few of the most actively traded contracts ended the week in-the-money on the heels of the slide in spot market prices. Satyam's September put option contract at a strike price of 240 finished the week in-the-money. Trading in the contract numbered 2,321 contracts. Another actively traded September contract that ended the week in the in-the-money was Bharat Petroleum's contract at a strike price of 260. During the course of the week the put option contract notched a volume of 737 contracts. Futures: As always, trading in the futures market for stocks was dominated by exchange of contracts for Satyam Computers, Reliance Industries, Infosys and Digital GlobalSoft. The relatively larger degree of volatility in the aforementioned stocks makes them favourites in the derivatives markets. Satyam's September contracts topped the volume list. Around 49,753 September contracts in Satyam were traded last week. Satyam was followed by Reliance's Septemebr contracts, with market participants exchanging 24,821 contracts of the stocks. Infosys came third in the volume list on the heels of 22,627 September contracts of the stock changing hands.
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