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K.S. Badri Narayanan

WITH the benchmark index, Nifty jumping by around 2.25 per cent during last week, trading activity picked up further at the futures & options segment. The average daily turnover during the week improved to about Rs 6,119 crore from the previous week's Rs 6,074 crore, which also saw the July contracts expiring.

Owing to the strong bullish undertone in the equity market, calls remained more active than puts, in the options segment.

Index futures: The near-month August contracts were the most active and closed the week at 1215.95 as against the previous week's close of 1186.95, registering a gain of 2.44 per cent. They closed at a discount to the Nifty spot close of 1222.65. Open interest in August futures jumped to 20,766 contracts from previous weekend position of 15,632 contracts.

September futures closed the week at 1215.55 (1186) with open interest improving to 746 contracts (482 contracts). Both these contracts closed the week in a discount to the Nifty spot close of 1222.65. The market is generally considered to be in backwardation when the spot price exceeds the future price or a nearby futures prices is greater than a more distant futures price. (The market has been in backwardation for quite some time now).

Those who went long on these futures last week could have seen their positions with smart profits.

Stock futures: Among individual stock futures, contracts such as Reliance, Tata Steel, SBI, Satyam and Maruti were the most actively traded.

The August futures on SBI closed the week at Rs 425.65 as against the previous week's close of Rs 423.60. Open interest improved to 8,775 contracts from last weekend position of 8,200 contracts. The September contract on SBI inched up to Rs 428.15 (Rs 427.40) with open interest jumped from six contracts last week to 31 contracts during the week.

Both these contracts closed the week in premium to the underlying equity, which closed at Rs 422.15.

Contracts on Satyam were the most active among infotech stocks; the August futures on Satyam closed the week lower at Rs 205.75 (Rs 207.35) and in premium to the underlying spot close of Rs 204.50. Open interest jumped from last week position of 2,960 contracts to 4,095 contracts. Satyam September futures ended weak at Rs 206.50 (Rs 210) with open interest improving to from just one contract to 10 contracts.

The recently-listed Maruti contracts were also active; the August futures on Maruti ended the week at Rs 198.90 as against the spot close of Rs 197.15.

Index options: With the Nifty index witnessing a steep increase in value, the August 1200, 1210 and the 1220 strikes turned active during the later part of the week among the calls.

The in-the-money (ITM) August 1220 calls on Nifty closed sharply higher at Rs 20.40 as against the previous week's close of Rs 14.15 while open interest positions jumped sharply to 1016 contracts (134 contracts).

The out-of-the money (OTM) calls on Nifty were not (as of Friday's close) available for trading as the index spurted so sharply on Friday.

Among the puts, the August 1200-strike, the August 1180-strike and the August 1190-strike were active.

The August 1180 puts (OTM) closed the week sharply lower at Rs 10.15 (Rs 21.45) and open interest improved to 1267 contracts (559 contracts).

Equity options: Led by Reliance and Tata Steel, old-economy counters dominated the action during the week. Contracts on SBI, HLL, HPCL, Satyam Computer and Maruti were the most sought after among calls while trading on puts on evoked a little response.

The August 350 and 350 strikes on Reliance and the August 220-230 strikes on Tata Steel were the most active among them.

The Reliance 360 calls (ITM) closed slightly higher at Rs 14 (Rs 12.20) while open interest jumped to 1231 contracts (714 contracts). The Reliance stock closed the week at Rs 363.30.

The Tata Steel 220 call (also ITM) ended higher at Rs 16.40 (Rs 9.45) and the open interest jumped to 549 contracts (247 contracts). The underlying equity closed the week at Rs 233.

Among the puts, Satyam was the most active with the August 200 and the 210 strikes being keenly traded. The Satyam 200 puts ended the week on negative note at Rs 8.50 (Rs 9.90) after moving in the narrow range during the week. The Satyam stock closed the week at Rs 204.50.

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