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C. Raja Rajeshwari

NSE recorded all-time-high volume in the derivatives segment - Rs 5,654.87 crore on Thursday. The previous highest was Rs 5,124.81 crore recorded on July 15, 2003. The implied volatility of most of the contracts has increased this week. Generally, such increases in implied volatility indicates that the market has either topped or bottomed out. For the coming week, the implied volatility would increase if the stocks continue their downtrend. In addition, this increase in implied volatility is also due to the increase in the volumes.

Nifty: The index lost 21.65 points on a week-on-week basis. Volumes in Nifty puts increased, on days when the index fell heavily.

# The most active call was the July 1150-strike, which is at-the-money. The call was quoting above Rs 20 last week. However, with the Nifty falling, the call lost its moneyness and closed lower this week.

# The implied volatility for the puts increased to more than 20 per cent during the start of the week, but reduced to 18.94 per cent on Friday.

# In addition, the put-call ratio declined to 0.79 from 0.83 of the previous week.

# The July future contract is quoting at a premium in spot from Wednesday. This premium cannot be construed as bullishness as the quantum of premium has reduced during the following two days. When looked along with other indicators, this still fogs sentiment about the Nifty.

# August futures had attracted trading volumes with two weeks left for expiry of the near month.

Tata Steel: The steel stock has been on the uptrend for the past two weeks and the trend remains positive. There could be drastic movements in the underlying stock owing to the announcement of its quarterly results on July 23.

# The stock has gained Rs 13.3 on a week-on-week basis to close at Rs 197.15 this week.

# The July future is quoting at a premium to spot. This premium increased this week, indicating bullishness in the stock. Open interest also increased by 10 per cent

# The implied volatility of the calls has jumped to 53.35 per cent from previous week's 41.63. This indicates that the calls have turned expensive, with more scope for the appreciation in the call premium.

# The open interest for this stock stood at 92 per cent of the market wide limit, suggesting that the stock is in the overbought territory.

# The put-call ratio increased to 0.43 from 0.40 of previous week.

Tata Power: The stock had subdued trading and ended at Rs 148.25. Overall, open interest increased by 9 per cent.

# Though the July future quoted at a premium to spot, the quantum of premium decreased over the week. Open interest also decreased by 7 per cent. The July 160-strike and 150-strike calls were the most active and closed the week with huge open interest.

# The concentrated trading interest in the calls has caused the implied volatility of the call to jump from 44.21 per cent to 49.76. The implied volatility for the puts reduced over the week from 43.38 per cent to 38.78 per cent.

Other stock options: The traded volume in Reliance increased, however open interest declined indicating that money is leaving the contract.

# Mastek's results were announced on Tuesday and the stock has declined by Rs 125.45 to close at Rs 200. The decline both in price and open interest indicates that there is weakness in the stock. The implied volatility has jumped two-fold in both calls and puts.

# Cement stocks such as ACC and L&T had a mixed week.

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