10 September 2011

FII Futures Interest

The folks at Vtrender do a lot of good F&O data analysis. I have "stolen" some data from them, did some tweaking to produce the above chart.

It shows FII Nifty Futures Open Interest. The Blue bars are Nifty change per day and the Red and Green lines are cumulative Short and Long Open Interest.

What we see is that after 29th and 30th August when Nifty moved from 4750 to 5000 causing a lot of Shorts to run for cover, Shorts are only getting added. Longs got into the system since the start of series, but is now looking on weak footing.

Interesting to note is that from 6th to 8th September, Nifty rallied around 150 points and the amount of Long added is 14k contracts while shorts got added to the tune of 50k contracts! Friday saw a good amount of long covering and short addition. Did Friday marked the turn of events? Other unknown factor here is how much rollover of Shorts and Longs happened into this series from August.

Tracking FII money flow (more so in Derivatives) gives us a good overall picture of Markets in near term. But at Inflection points where huge long term money gets in or out of the Market, these analysis can and will seem futile.

Another thing which I feel everyone should keep in mind is that, FIIs are not a single body. I bet most of the big players would not be even knowing about some small players existence. They are not with a single opinion about the market. They do not conference before the Market open to decide what their strategy should be for the day. I am sure, at times there must be polar differences in their opinions and their actions, there must be Bulls and there must be Bears. You never know, which deep pocket FII gets freaked out due to Greece Default Fears or who suddenly pulls all his money from China to put it in India!


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