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July 9, 2001
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Money > Business Headlines > Report July 9, 2001 |
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Markets take fancy to short-term contracts in option tradingB G Shirsat One-month contracts were the most favoured instruments in the first week of trading in individual stock options at the National Stock Exchange, indicating that investor are wary of taking a long-term view of the market. But from the direction of the markets during the week that ended, it would appear that call option holders have placed wrong calls as they paid an average of five per cent premium over the strike price whereas the market declined by over four per cent during the week. The put option holders may have suffered a marginal loss as they paid a 5.14 per cent premium on the strike price. Infosys Technologies, whose first quarter result is due on July 10, was bought at a strike price of Rs 3,900 on July 2, at a premium of Rs 10 per share. On the bearish side, a put option at Rs 3,100 was traded on July 5 at a premium of Rs 50 per share. Reliance had a call option at Rs 400 on July 2 at a premium of Rs 2. At the same time, there were put options at Rs 280 with a premium of Rs 2 per share. During the week, 2,058 contracts covering 2.3 million shares in the 22 scrips were traded. Though the notional value of contracts aggregated Rs 457 million, the premium paid by the call and put options holders was put at Rs 23 million. Call options were the preferred instruments with 1,531 contracts covering 183 million shares. On the other hand, 527 contracts covering 473,000 shares were traded in put options. The premium paid by the call options aggregated at Rs 17 million while premium for put options was Rs 6.4 million. Options on Reliance Industries were the most traded one with 723 contracts for 434,000 shares. The option holders paid an average premium of 3.9 per cent (Rs 5.7 million) for Reliance on notional value of Rs 147 million. In Satyam Computer, the average premium was placed around seven per cent for 37 million shares in 308 contracts. There were 257 contracts for 463,000 shares in Tata Steel, with bidder paying an average of five per cent premium. There were 149 contracts for 641,000 shares in Reliance Petroleum at an average premium of 4.92 per cent. Options on Infosys Technologies were traded over 239 contracts for 23,900 shares. Powered by YOU MAY ALSO WANT TO READ:
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