INSUBCONTINENT EXCLUSIVE:
MUMBAI: Trade action on the Jet counter on Thursday, a day after the airline suspended its operations, might belie the view of an increasing
majority in the market that the cash-strapped airline might fade into oblivion.
The share fell 31 per cent to Rs 165.75 when markets opened
Thursday after a holiday the preceding day when Jet announced the suspension of operations
The stock was in an FO ban period since April 3, meaning fresh buy-sell derivatives bets could not be initiated
What you buy /sell during a trading session, you square off before its close and pay or receive the difference
Ahead of that, on Tuesday, after the Jet board met to request for a lifeline from lenders led by SBI, the quantity of shares traded jumped
to around five times the daily average of the past few days
However, compared with traded quantity (5.09 crore shares), shares that actually changed hands were 18.2 lakh or 3.6%, as per NSE data
On Wednesday, the airline halted operations as lenders declined to extend a lifeline
But that was a trading holiday.
On Thursday, as the market opened, the share gapped down 10% and by trading day end closed down 31%
The number of shares traded, like on Tuesday, was around five times that normally traded daily, with one interesting difference
Against traded quantity of 5.68 crore shares, delivery stood at 57.38 lakh shares, or 10% of traded quantity, a very high percentage for the
Jet counter, NSE data revealed.
This buying prevented the share from plumbing more
Derivatives analyst Nitin Kedia of Kedia Commodity , an NSE member , believes that some of these buyers expect the stakeholders (banks,
Another significant feature was that despite the share falling 31% to Rs 165.75 sellers of the 220 and 200 puts expiring on April 25 did
not square off positions in a big way despite their facing a huge loss
Basis Thursday closing the 220 put is Rs 55 in the money and the 200 put is Rs 34 ITM for the buyer
That means the seller is facing a huge loss but is still holding on in the hope that the dark clouds would clear, added Kedia
A put seller loses when the option price falls below the strike sold minus the premium earned
The Jet counter is out of FO ban from Monday
How trade pans out will be interesting to watch
