Tomorrow is expiry day and data tells us that FII’s will do what every single trader out there does- book positions.
We will see a lot of unwinding tomorrow of contracts built during the month
First a look at what has happened in the series so far.
we have had 264139 long contracts added in march against 100711 short index contracts.
Short puts have come as a healthy 265536 contracts against 225522 long puts and 260015 long calls against 98378 short calls.
The vwap of the series has been at 6490 F in NF and 11833 in BNF , both of the March contract.
Clearly a month dominated by longs all through.
But tomorrow is different and data tells us that longs or shorts most positions get closed down big time tomorrow
The chart below is FII data on expiry days starting from the last series ( FEB 14) and going back to FEB 13.
Except for that one date in April last year when index futures and stock futures added we can see that it is a sea of red meaning liquidation time.
This is also why we track contract sizes and don’t go by cash buy/ sell numbers as those numbers hide more than they reveal.
Tomorrow we will be watching how many get closed and what kind of additions come back on the first day.