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Short Covering Helps Market To End Higher !!15th February 2010 to 20th Feb 2010
WEEKLYOPTION & DERIVATIVE REPORT
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R E S E A R C H
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Global Indices
Weekly Report Derivatives15th February to 20th Feb 2010
Derivative Wrap
Key HighlightThe 30-share BSE Sensex closed at 16,152.59, up 230.42 points or 1.45% and the 50-share NSE Nifty rose
69.65 points or 1.46% to 4826.85. Indices gained 1.4% this week. The benchmark indices outperformed
the broader indices; the BSE Midcap and Smallcap indices gained 0.8% each.
The benchmark Nifty saw a huge buying interest today on the back of positive global cues and short
covering. It closed above the 4800 mark for the first time in the last six sessions. Buying across all the sectors
helped the Sensex to close with more than 200 points rally.
Global cues remained positive today on hopes of likely bailout plan for Greece. Among the Asian markets,
Hang Seng and Kospi went up 1.8% each. Straits Times was up 0.7% and Jakarta was up 1%. Shanghai
was up just 0.1%. Taiwanese and Japanese were shut today.
China's central bank took the second step in a month to restrain inflation and damp asset prices,
ordering lenders on the eve of a weeklong holiday to set aside larger reserves.
Asian stocks rose for the first week in four, led by commodity companies and banks, as optimism for
the global economy overcame concern about Greek finances.
GlobalMarketNews
Spot Nifty
Nifty Futures
Bank Nifty Futures
Current Close
4828.25
4826.85
Weekly Change
+105.01
+71.5
2.2%
1.50%
%Change
8400.10 +150.01 1.82%
Dow Jones
FTSE
Current Close
10067.33
Weekly Change
-53.13 -0.52%
%Change
5188.50 +42.78 +0.83%
CAC 4012.91 -106 0.03%
Nikkei 10198.04 -216.25 -2.08%
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R E S E A R C H
U.S. stocks, commodities and the euro fell as China unexpectedly boosted bank reserve requirements
and data showed Europe's economic recovery almost stalled. Equities trimmed declines as the dollar
retreated from its strongest level of the day, reducing losses in commodities.
Japan's 10-year bonds completed a weekly gain on speculation chronic deflation will encourage the
Bank of Japan to keep its benchmark interest rate near zero when policy makers meet next week.Japan's 10-year bonds completed a weekly gain on speculation chronic deflation will encourage the
Bank of Japan to keep its benchmark interest rate near zero when policy makers meet next week.
Japan's economy probably grew at the fastest pace since the first quarter of 2008 as a global trade
revival fueled demand for the nation's exports.
Harvard University, the richest U.S. university, reported the value of its U.S. securities increased 26
percent in the fourth quarter, as it bought exchange-traded funds that track markets outside the U.S.
Matthew Rose, chief executive officer of railroad Burlington Northern Santa Fe Corp., welcomed
Warren Buffett as his company's new owner while showing analysts and hedge-fund managers the
door.
Goldman Sachs Group Inc. investment management co-head Marc Spilker is leaving the firm after two
decades and will be replaced by a predecessor.
President Barack Obama will announce next week that Southern Co. will get a federal loan guarantee
to build two nuclear reactors in Georgia, the first support awarded under a five-year-old law, an
administration official said.
U.K. stocks fell, led by financial and mining shares, after China, the world's fastest growing major
economy, and ordered banks to set aside more deposits as reserves for the second time in a month.
U.K. banks approved the most mortgages for first-time buyers in two years in December as people
rushed to buy homes before a tax break ended, the Council of Mortgage Lenders said.
Derivative Wrap
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Source: Bloomberg
Weekly Report Derivatives15th February to 20th Feb 2010
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Option Strategy Corner
Weekly Report Derivatives15th February to 20th Feb 2010
INDEX PRICE
4826.85 LONG CALLPREMIUM 107
NIFTY (Lot Size / Expiry Date - 50 / February 25, 2010)
Outlook : BULLISH
STRIKE PRICE PREMIUMMAXIMUM
PROFITSTOPLOSS
BUY 4800 FEBCALL
UNLIMITED 60
PAY OFF TABLE
ON EXPIRY NIFTY CLOSES AT
4600
4700
4800
4900
5000
5100
5200
Strategy : LONG CALL
Risk: Limited to the premium. (Maximum loss if market expires at or below the option strike price).
Reward: Unlimited
Breakeven: Strike Price + Premium
NET PAY OFF FROM CALL OPTION
-107.00
-107.00
00.00
-7.00
93.00
193.00
293.00
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R E S E A R C H
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NIFTY MADE CLOSING ABOVE THE LEVEL OF 4805 TODAY. IT
AGAIN WAS HIGHLY VOLATILE DAY IN MARKET. NOW WECOULD SEE THE INTRA DAY RESISTANCE FOR NIFTY AT 4875, IF
IT BREAK THIS LEVEL & SUSTAIN ABOVE IT ONE COULD SEE THE
LEVEL OF 4950 IN NIFTY FUTURE.TECHNICALLY WE COULD
EXPECT THE TREND REVERSAL IN NIFTY, WHEN IT CLOSEABOVE THE LEVEL OF 4950.IF NIFTY CLOSE ABOVE THE 4950,
ONE SHOULD WITHDRAW THEIR SHORT POSITIONS & SHOULD
FOCUS ON LONG SIDE.THE MAJOR SUPPORT BASE FOR NIFTY
SEEMS TO BE AROUND THE RANGE OF 4650 TO 4700.
TECHNICAL PICTURE
Technical View
Weekly Report Derivatives15th February to 20th Feb 2010
Properties
Support 1 4650
4520
4875
5000
Values
Support 2
Resistance 1
Resistance 2
Weekly Levels
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R E S E A R C H
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Index Futures and Index Options:
Index futures saw a trading volume of Rs.15478.15 crores arising out of 668927 contracts and Index options saw 1793409contracts getting traded at a notional value of Rs.43635.23 crores. The total turnover of the Futures & Options segment of the
Exchange was around Rs.73749.79 crores.
Instrument wise summary :
Index Future
Symbol
NIFTY
MINI NIFTY
BANK NIFTY
No of ContractsTraded
80491
560278
Traded Quantity
1609820
28013900
776.14
13514.06
Total Traded Value(RS. in CR.)
Open Interest (Qty)as at End of Trading Hrs
1553440
31822150
CN XIT
27922 1396100 1174.46 1217050
228 22800 12.87 48700
Weekly Report Derivatives15th February to 20th Feb 2010
Symbol
NIFTY
MINI NIFTY
BANK NIFTY
No of ContractsTraded
658
372
1792379
Traded Quantity
13160
18600
89618950
6.42
15.95
43612.86
Total Traded Value(RS. in CR.)
Open Interest (Qty)as at End of Trading Hrs
32960
140200
108029450
Index Option
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