Financial Daily from THE HINDU group of publications
Sunday, Nov 24, 2002
Financial Daily from THE HINDU group of publications Sunday, Nov 24, 2002 |
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Investment World
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Derivatives Markets Markets - Derivatives Markets Tech stocks in limelight Sanjiv Shankaran
EQUITIES firmed up last week on the heels of significant buying in blue chips. It is difficult to pinpoint the reason for the surge in investment. All that can be said with a degree of certainty is that investors perceive value in blue chips once the BSE Sensex drifts down to about 2,800. The surge in buying last week pushed up the Sensex to 3,142 points, a rise of about 3.5 per cent in relation to the closing value of the week ended November 16, 2002. Information technology stocks set the trend for the broad market movement. Infosys Technologies, Satyam Computers and Digital GlobalSoft registered marked gains last week. Among other notable gainers were Reliance Industries and ICICI Bank. The consequence of the marked gains in technology stocks was that derivatives market received a boost: the most actively traded derivatives contracts are frontline technology companies and Reliance. Among derivatives contracts, investors who had bought call option contracts may have registered large gains. On the other hand, investors who may have purchased the most actively traded put option contracts are likely to have seen their positions slide out-of-the-money. Options: November ending contracts dominated trading in both call options and put options. In the case of both types of contracts, Satyam Computers, Infosys Technologies and Reliance Industries were the most popular contracts. Among call option contracts, Satyam's November contract at a strike price of 270 was the most frequently traded one. It notched a volume of 5,748 contracts. The contract ended the week in-the-money. Satyam's November call option at a strike price of 260 was another popular contract. It ended the week in-the-money and generated an aggregate volume of 5,187 contracts. Among the other November call option contracts that ended the week in-the-money were Reliance's at a strike price of 280, Infosys' at a strike of 4,300 and Reliance's at a strike of 270. Reliance 280 recorded a volume of 4,085 contracts, and Reliance 270, a volume of 4,085 contracts. The volume in Infosys 4300 was 1,611 contracts. Put option contract holders may have had an unhappy week. The firm trend in the spot market in the latter half of November has pushed the most popular active contracts out-of-the-money. Satyam 260, with a volume of 3,926 contracts topped the popularity list. The contract ended the week out-of-the-money. Among other popular November contracts were Reliance 270, wherein 1,299 contracts changed hands. This one too ended the week out-of-the-money. Futures: The volume in the most actively traded futures contracts increased this week in relation to the week ended November 16, 2002. Along with the rally in the spot market, action in the futures market too picked up. Most of the activity was in Satyam's November contract and Reliance November contract. Trading activity was 56,196 contracts and 35,838 contracts respectively.
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