Rising share of arbitrage funds in futures segment weighing on returns

Estimates suggest such funds account for over half of stock futures segment

The rising share of arbitrage funds in the futures segment is making it difficult to generate optimum returns. Such funds now account for over half of the futures’ segment open interest (OI).

According to data collated by Capitalmind, arbitrage funds accounted for 51 per cent of single-stock futures’ OI at the end of June, when total futures contracts for the near-month had an OI of Rs 93,663 crore.

Experts say the recent weakness in returns could be attributed to these funds now being the largest players in the single-stock futures segment.