Your Guide To FII Positions For Jan. 2 Trade

The recent trading sessions have shown significant activity in the market, particularly concerning Foreign Institutional Investors (FIIs). As of January 2, FIIs have been actively selling and buying in various segments of the market.

FII Trading Practices

On January 2, 2025, FIIs sold index futures worth Rs 767 crore and stock futures worth Rs 758.9 crore. However, they made considerable purchases, buying index options worth Rs 12,311 crore and stock options worth Rs 22.38 crore. This indicates a strategic shift in their trading approach, focusing more on options rather than futures.

Continuing a trend, FIIs have now been net sellers in the cash market for 12 consecutive sessions, with domestic institutional investors (DIIs) buying stocks for 11 consecutive sessions during the same period.

Cash Market Insights

According to provisional data, Foreign Portfolio Investors (FPIs) offloaded a substantial amount of stocks, totaling Rs 1,782.7 crore. In contrast, DIIs purchased stocks valued at approximately Rs 1,690.4 crore. Overall, in 2024, FIIs collectively sold stocks worth Rs 7,292.3 crore, while DIIs have been net buyers, accumulating stocks valued at around Rs 5.32 lakh crore.

Despite this selling trend in 2024, data from the National Securities Depository Ltd. shows that foreign institutions have been net buyers worth Rs 427 crore in Indian equities so far this year.

Futures and Options Analysis

As the January 25 expiration approaches, the outstanding positions—also known as open interest—in the derivatives segment have seen an increase for FIIs in the Nifty futures. The long-to-short ratio for FIIs in index futures currently stands at 14% long positions against 86% short positions.

In terms of contract values, the total Nifty 50 futures open interest increased by Rs 73 crore from Rs 31,640 crore to Rs 31,713 crore at the end of the trading session.

Market Indicators

On January 2, the Nifty January futures saw a rise of 0.42%, pricing in at 23,907 with a premium of 165 points, while open interest experienced a slight decline of 0.16%.

The open interest distribution reflects that most activity is concentrated at the 24,500 call strikes, while the 23,000 put strikes are showing maximum open interest.

Investor Ratios

The overall long-short ratio for foreign investors has decreased slightly from the previous session, now standing at 1.45 compared to 1.47. These market activities come amid the ongoing fluctuations in the Indian stock market.

In summary, the beginning of the year has seen significant movements in FII trading, with a clear focus toward index and stock options, indicating a tactical response to market conditions.

FII, Trading, Options