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Institutional Activity

Decode the Institutional Action-F&O

As a retail trader it is very critical that you understand the way the markets function and what drives the markets.

Well here’s a thought you might consider to be true.. The idea is that markets are driven by demand and supply which in turn are driven by money size. If one has big chunk of money he can create that demand or supply in the market by placing the orders and that will drive the market.

This is the simple funda of how markets move, now think of who can be these folks who have big money obviously the institutions like banks,hedge funds,government funds who bring in a lot of capital to the table.

Imagine if you can understand what the institutions are doing in the market then would you not be in a better sense of what markets can do?

Sounds good right ? Read on to understand more about how to read the institutional action in derivatives markets.

First we would like to introduce you to a report named “Participant wise open interest” which is published by the NSE exchange website every day EOD here’s a link to download the report Click Here

In the given link you can select “Participant wise open interest” and the date that you want the report for.

What all are in this report?

  • Participant wise open positions classified into Index futures, index options(call,put) and stock futures.
  • The positions are reported as number of contracts outstanding as at the report date.
  • The participant categories presented in the report are FII,DII, Clients,Pro’s.

What I can know from this report?

  • The summary of open positions held by FII’s,DII’s,Pro’s,Clients(retail).
  • As the report is day wise you can calculate the difference between two day’s reports to know the day-to-day changes.

Now that you understand that what information you can get from this report, give it a try downloading this report and calculating the daily changes and track it over time to understand how different participants trade the markets on different days.

One thing worth noting is that the reports are released End of the Day and are not real time.

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