AN exciting day second-guessing investment bank derivative warrant issue activity took its toll on Hang Seng index futures, as an end-of-day rally in key stocks failed to materialise. February futures slumped 110 points to 7,970, a discount on the cash of 42 points, on modest turnover of 17,929 contracts. March futures fell 97 points to 8,030 on 98 contracts. Rumours of covered warrant issue linked trading by investment banks saw the cash market rise to a high of 8,173 in the morning. Failure of a number of the alleged issuers to go-ahead with their issues and the lack of an expected end of day rally saw a number of overseas investors sell-off after the cash market stopped trading. Jardine Fleming said in index options trading: 'Bears dominated the options market following the rally.' The brokerage said premium sellers continued to sell February calls. Premium sellers are investors who believe the cash market is expected to stay flat or trade within a defined range over the given period of time. Other investors bought February 7,700-8,000 two by one ratio put spreads. Implied volatility was about 34 per cent. Trading was quite active with a total of 3,853 lots changing hands.