F & O Open Interest Rockets To Rs 5,332 Crore

Open interest or the value of futures and options (F&O) contracts that have not been exercised, zoomed to a record high of Rs 5,332 crore on June 25, 2003. Never before has such a forward position been built up on bourses.

Meanwhile, the notional turnover in the F&O segment touched a record high of Rs 5,085 crore on June 26. The average daily F&O turnover jumped to Rs 3,331 crore in June 2003, 31 per cent higher than the average of Rs 2,544 crore in May 2003 and 186 per cent over Rs 1,167 crore in June 2002.

Even during the days of automated borrowing and lending mechanism (ALBM) on the bourses, the highest outstanding was only Rs 2,964 crore in February 2001. In the revised carry forward system (badla) on the Bombay Stock Exchange (BSE), the all-time high outstanding was Rs 3,876 crore, in February 2002.

Investors have been building up speculative positions in the F&O ever since the markets declined to a six-month low on April 25, 2003. The open interest position has more than doubled from Rs 2,313 crore on April 26 to Rs 5,332 crore on June 25.

At this level, the market value of the open interest in the F&O segment amounts to 173 per cent of the total turnover in the National Stock Exchange