Futures on rebound after dormant day

PUBLISHED : Friday, 20 October, 1995, 12:00am
UPDATED : Friday, 20 October, 1995, 12:00am

HANG Seng Index futures yesterday rebounded from the sluggish trading on Wednesday to swing back above the 10,000-point level.

The October contract rose 40 points to close at 10,005, a premium of 23 points over the cash index.

While the cash market was modestly strong after the robust growth earlier this week, strong overseas buying was found in the futures market in early trade.

Index futures slumped below the 10,000-level on Wednesday when equity investors cashed in their profits.

Active buying was found in October futures yesterday morning on the back of bargain hunting.

Local buyers joined in at the 10,010-level to send the future gradually up to 10,065 on thin trading, according to Jardine Fleming.

The morning session ended at 10,038, a 29-point premium to the cash market.

'Local sellers dominated the afternoon and eroded the gain in the morning by pushing the October future down to 9,985.' Overall volume dropped to 15,990 lots from 18,705 on Wednesday.

October traded between 10,065 and 9,960 points, with 14,294 lots transacted.

November rose 45 points to 10,020 to give a premium of 38 points over the cash.

Volume declined from Wednesday's 1,744 to 1,696 lots.

In index options, the market was dominated by overseas players selling back-month options throughout the day, Jardine Fleming said.

Activities focused on November 9,400 puts, 9,600 puts and December 9,600 puts.

Buyers in November 10,200 calls confirmed the bullish sentiment while local bears hedged their position by buying October 9,800 puts.

Total volume was 1,716 lots while open interest was 37,177.

Implied volatility for October 10,000 calls was 19 per cent while that for 10,200 calls was 20 per cent.

Implied volatility for November 10,200 calls was 21 per cent.

In stock options, 5,915 HSBC options were traded.

Cheung Kong options had a volume of 1,506 lots and Swire Pacific A saw 352 lots changing hands.

No trading for stock futures was recorded yesterday.