Kalyan Jewellers India Ltd. shares were in focus in the derivatives market as its near-month futures rose more than 3%, accompanied by an increase in open interest. The combination points to fresh long positions in the August contract, even as positioning in the October series showed signs of short covering.
Kalyan Jewellers' Aug. 25 futures rose 3.33%, or Rs 20.15, to Rs 625.70. Open interest increased 6.02%, indicating a long buildup as both the futures price and outstanding positions increased.
The September contract also advanced. Kalyan Jewellers' Sept. 29 futures gained 3.59%, or Rs 21.65, to Rs 624.55, while open interest declined 2.35%. The rise in price accompanied by a fall in open interest indicates short covering in the contract.
The positioning shows traders adding fresh long positions in the near-month contract while some existing short positions were being closed in the September series.
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August Long Buildup
Kalyan Jewellers' August futures traded at a premium to the underlying stock, with the basis at Rs 3.80, according to the derivatives data.
Open interest in the contract increased 6.02% as the futures price climbed 3.33%. A simultaneous increase in price and open interest is classified as long buildup in the derivatives market and indicates the addition of fresh long positions.
The move puts Kalyan Jewellers among the stocks seeing a notable increase in futures open interest alongside gains in price.
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September Shorts Ease
The positioning differed in Kalyan Jewellers' September futures.
The contract rose 3.59% to Rs 624.55, but open interest fell 2.35%. Its basis stood at Rs 1.50.
The combination of a higher futures price and lower open interest points to **short covering**, which occurs when traders close existing short positions.
The August and September contracts, therefore, show two different sources of buying activity. Fresh long positions are being added in the near-month contract, while the next-month contract is seeing shorts being reduced.
F&O Setup
The August contract provides the clearer indication of fresh accumulation, with a more than 3% rise accompanied by a 6% increase in open interest.
The September contract, meanwhile, suggests part of the move is being supported by traders exiting bearish positions rather than adding new longs.
Open interest measures outstanding derivatives contracts that have not been closed or settled. Rising prices with increasing open interest indicate long buildup, while rising prices accompanied by declining open interest indicate short covering.
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