Street signs: New blood in derivatives market, new expiry clock is ticking

New blood in derivatives market: Will these stocks break the mould?

 

After nearly three years, new stocks were added to the futures and options (F&O) segment on Friday, bringing the total number of stocks available for derivatives trading to 223. According to brokerages, the 45 newly added F&O stocks generated an open interest (OI) of Rs 3,400 crore on the first day, with the top 10 stocks accounting for 60 per cent of the OI. Among the most active OI contributors were Zomato, Jio Financial Services, Life Insurance Corporation (LIC) of India, Adani Green, and BSE. “The new additions currently account for just 1 per cent of the total single-stock futures OI, but steady growth is expected,” noted a report by Nuvama. According to the brokerage, Jio Financial, LIC, Adani Green, and BSE saw investors building bullish positions, while Zomato, DMart, Yes Bank, and Paytm attracted more short-selling interest.

 

Market timers reset: The new expiry clock is ticking

 

India’s leading bourse, the National Stock Exchange, has announced changes to the ‘expiry day’ for its index derivatives contracts. Starting January 1, all monthly contracts for Bank Nifty, Nifty Financial Services, Nifty Midcap Select, and Nifty Next 50 will expire on the last Thursday of each month. Currently, expiry dates are spread across various days of the week. Similarly, BSE has moved the expiry of all its index derivatives to the last Tuesday of the month. These announcements follow the Securities and Exchange Board of India’s (Sebi’s) recent measures to curb excessive volumes and speculation in the futures and derivatives markets. Experts believe this move will reduce the frenzy surrounding zero-day options and discourage speculative trading in the derivatives segment. Despite suffering heavy losses, retail investors continue to make highly speculative bets in the derivatives market, with an average holding period of less than 30 minutes.

 

Undercover in trading trenches: Sebi’s stealth op on shadow players

 

Social media platforms are flooded with advertisements for online stock market tutorials and crash courses. These courses often lure students with low fees but later charge extra for stock tips. However, providing unregistered investment advice is illegal under the Securities and Exchange Board of India (Sebi) regulations. To combat this, regulatory officials go undercover as ‘mystery students’ to monitor these courses and take action when they suspect wrongdoing. “We cannot take action against every single entity, but we do go undercover as mystery students to gather evidence. If we receive a complaint or have reason to suspect misconduct, we will take action,” explained an official. Sebi has previously acted against several such entities, issuing orders and penalties.