FIIs Now Hold 8 Long Positions for Every 1 Short Position in Index Futures

Nifty’s July future contracts expired with strong gains of over 4 percent for the month so far, with the Nifty also climbing to a 16-month high. Foreign institutional investors now hold long positions in nearly 2.5 lakh contracts in index futures, against only 32.8 thousand contracts in short positions, according to data available on the National Stock Exchange.

This ratio of 8 longs for every 1 short is substantially higher than 5:1 ratio seen during the expiry of the June series and the 4:1 ratio seen in May. FIIs’ position in index options are more evenly placed with 1.9 lakh contracts in index calls and 2.6 lakh contracts in index puts in open interest.

Nearing Overbought Territory

Investors rolled over 61 percent of their July contracts to the next month, a number substantially lower than the 75 percent average over the previous six expiry sessions.

Nifty’s 14-day relative strength index currently stands over 69. A reading over 70 is seen as a sign of the market getting overbought.

FII Interest Highlights

• Foreign institutional investors bought stock worth Rs 1,767 crore on net basis in the cash market on July 28.
  
• FIIs have net bought Rs 10,601 crore in July so far.
  
• FIIs bought index futures worth Rs 81 crore, and index options worth Rs 2,553 crore.