The Nifty in its previous session had made a pattern very near to a bullish maribazou. This was indicating that the market is about to go up. The India VIX index which had went down the previous day also indicated a high market opening.
Other news were also bullish with the India factory production growing sharply, and global markets opened up.
Going through the data it appears that the Individual traders were bullish, but the FII, DII and Brokerage Houses (Pro) were bearish. The data made it appear as if the market highs would not sustain since the big players would take over. But post market it seems the retail traders prevailed. This was the only signal that confused me, hence I refrained from taking too big a position.
What were your analyses and predictions. Experienced traders please advice.
@haribabu If they are selling in cash market and going long in FnO, then why is it that the cash market keeps going up. Is it not that the FII & DII funds that raises or pulls down the market. Or are we retail traders missing something.
Bro, Why r u considering DII’s fr derivative analysis? DIIs dont trade in derivatives, they just use derivatives market fr hedging purpose. U can observe their derivatives positions in small quantity to be almost opposite to market movement.
how did u consider brokerage houses as Pro? Does anybody else also think the same?
I am mostly trying to make sense of it all. I am looking at both now to observe trends.Pro are broker houses who are putting their own money and not their client’s money. I saw this definition on zerodha once.
Im not getting sense of Pro being a brokerage house. Ur sense of Zerodha being a proprietory house is wrong. Why the question of using client money comes into picture fr Pros?
Like @utsav linked correctly, PRO’s are exchange members trading on behalf of themselves. There are almost 2000 brokers/members on the stock exchanges, only around 300 to 400 offer clientele/retail broking. The rest of them essentially have a membership on the exchange just for trading for themselves. All the big trading firms have their own memberships. All of that turnover will show up in PRO. Even most of the 300 to 400 members offering retail broking also have trading desks to trade their own money. All of this turnover will show under PRO.
I was also relying earlier on these stats but these are highly misleading
It just says this is what at this moment market participants are appear to think.
Options data is highly unreliable. Some one may be selling a ATM PE option which makes that person bearish, if the same OTM PE option is sold this makes it bullish ! (Many may not think of selling ATM/ITM option but thats what big guys do ! else we wont have liquidity ! )
These things fluctuate a lot and lets not forget they have cash holdings also which we are not aware. We know how much they removed or added but never how much is left out and their exposure !
Finally lets not think that all FIIs are same. They dont have a slack group or whatsapp group to co-ordinate and do all actions at once hehe. Everyone of the FII , DII have their own thoughts and they operate individually ! They are also as clueless as us but better equipped.
@nithin why do they become members on the exchange and not use some broker they trust who already has a membership, who has all the infrastructure necessary? why spend all that money on the exchange to become a member? if they are worried about someone knowing their trades, once the order is executed everyone on the exchange will know immediately right? what advantage do they have becoming their own member?
For the big boys, becoming a member on exchange is just spare change. Money that goes into becoming a member is mostly deposits. Also exchanges have concept of alpha membership, where these deposit requirements are much lesser.
Once an order is executed on the exchange, no one knows who has executed them. So for example if Rakesh Jhunjhunwala bought a stock on the exchange today, no one gets to know if he trades through his own broking membership. If he trades through others, there is a risk that some dealer/risk management team person can track his trades (because he is big and can move the markets).
SEBI mandates that clients money and prop money (brokerage firms) money separately. But other than that there is no other mandate.
