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Stop Loss Hunting

A small thread :-

Yesterday Many People would have shorted PAGE IND in Futures for Results Trade between 23600 to 23200 and many would have kept SLs near 23800-24000
So all of a sudden yesterday at 2:37 PM someone bought a chunk of Page Industries in cash with about 3500 shares and very next minute sold most of it. The buying was done upto 23958 from 23600 and sold 23400.

Someone bought at 23900 and sold at 23400 loss of 17 lakhs in cash.
However, in Futures due to this spike in cash most of the SL's placed got triggered and in that particular minute a total of 8100 quantities were sold from 23550 to 24000 and 3875 the next min, assuming 2000 were buy to push rates, a total 9975 quantity in future was shorted.
Assuming an average of 23800 total 9975 (399 lots) shorted would need around 4 crores margin.

And buying in cash of 3500 shares would have needed around 1 crore margin in Intraday.

A total investment of max 5 crores.
In the Futures the closing was 23400 which would have resulted in a 400 point gain MTM which means about 40 lakhs mtm profit at close on 399 lots and a loss of 17 lakhs in cash means 23 lakh net gain notional.
As results were after market & most of the retail traders got stop loss hunted, this morning there was no major short covering and PAGE IND FUT opened at 22600 and cracked to 21600.

V/s 23800 shorting price if shorts were covered around 22000 profits would be about 1.80 crores.
On an total investment of 5 crores (max) of the operations gains upto 2 crores would have been made.

With retail traders kept out on account of smart stop loss hunting via cash.


Disclaimer: I am human & I might be wrong, this is just my reading of the events.
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