Traders trim positions ahead of poll results

Rollovers decline; open interest drops

Derivative traders cut positions going into the May series, indicating uncertainty and nervousness ahead of the election results next month. On the other hand, stock-specific bullish bets were carried forward, signalling that action might move to individual stocks in the run-up to the poll outcome.

April series Nifty futures saw a rollover of about 59 per cent, much lower than the three-month average of 65 per cent. The open interest in Nifty futures at Rs 10,000 crore was below the previous month's average of about Rs 15,000 crore.

“As we approach the May series, which is going to witness the election outcome, traders can expect high volatility. Owing to the extraordinary event next month, many positions have not been rolled over,” said Sahaj Agrawal, deputy vice-president, Kotak Securities. The general election results will be declared on May 16.

Analysts say that since positions taken to the next month have been light, benchmark indices could move in a narrow range. The highest options build-up in the Nifty was seen around 6,500 puts and 7,000 calls, indicating strong support at 6,750-levels. The cost of rollover in the Nifty moved up to 58 points from 41 points in the last expiry.

The overall market-wide rollover was also in line with market expectations, indicating a rise in stock-specific bets carried forward by traders.

The Bank Nifty, which has outperformed the benchmark indices since the beginning of the year, continued to garner interest from foreign institutional investors. Bank Nifty futures saw a rollover of 70 per cent as against a three-month average of 67 per cent.

According to analysts, the cost of carry for the Bank Nifty futures doubled during the day to 160 points from 80 points in the early part of the trading session. The open interest position in the market-wide futures was lower at Rs 1,03,700 crore against open interest of Rs 1,08,900 crore seen last month.