F&O Rollover Insights for May 2024: Stock Futures OI Hits New High

Nifty’s Roller Coaster Ride

The April series began with the Nifty reaching a new all-time high of 22,775. However, it then faced a downturn due to geopolitical tensions, which caused it to hit a low of 21,777. By the end of the series, the Nifty had recovered to 22,626 on April expiry day. Overall, the Nifty gained 1.09% during the April series, marking its third consecutive series gain. Bank Nifty outpaced the Nifty after three series of underperformance, gaining 3% during the April series.

Stock Futures Open Interest Hits Record High

The May series began with an all-time high open interest in stock futures, reaching 1,002 crore shares—up from 777 crore shares at the start of the April series. This sharp increase was driven by a significant rise in open interest for Vodafone Idea, which saw an increase of over 200 crore shares. Excluding Vodafone Idea’s contribution, open interest in stock futures still grew by 2.70%.

Top 3 Stock Gainers and Losers for April Series

Top 3 Gainers

Top 3 Losers

Highest and Lowest Rollovers

The highest rollovers in the April series were seen in:

The lowest rollovers were seen in:

Nifty Futures Indicate Long Rollovers, Bank Nifty Suggests Short Covering

The open interest in Nifty futures for the May series is slightly higher, with 1.24 crore shares compared to 1.22 crore shares at the start of the April series. This increase, along with the Nifty’s upward movement, suggests long rollovers into the May series. However, Bank Nifty futures open interest dropped sharply to 17.43 lakh shares, down from 49.83 lakh shares in the April series. This decrease, combined with the Bank Nifty’s positive performance, indicates potential short covering.

FIIs’ Long-to-Short Ratio Indicates Net Shorts

Foreign Institutional Investors’ (FIIs) long-to-short ratio in index futures fell to 0.64 at the start of the May series, down from 0.81 in the previous series. This suggests that FIIs are net short in index futures at the beginning of the May series.

Summary

The Nifty experienced a volatile April series but managed to close with a 1.09% gain. Bank Nifty outperformed with a 3% rise. The May series opens with record-high stock futures open interest, indicating strong rollovers, while lower open interest in Bank Nifty suggests short covering. However, FIIs are net short in index futures, signaling a cautious outlook for the May series.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.