How to read the futures data...

How to read the futures data sheet?

Understanding and deciphering the prices of futures trade is the first challenge for anyone planning to venture in futures trading. Economic dailies and exchange websites www.nseindia.com and www.bseindia.com are some of the sources where one can look for the daily quotes. Your website has a daily market commentary, which carries end of day derivatives summary alongwith the quotes.
The first step is start tracking the end of day prices. Closing prices, Trading Volumes and Open Interest are the three primary data we carry with Index option quotes. The most important parameter are the actual prices, the high, low, open, close, last traded prices and the intra-day prices and to track them one has to have access to real time prices.
The following table shows how futures data will be generally displayed in the business papers daily.

Series	First Trade	High	Low	Close	Volume (No of contracts)	Value                (Rs in lakh)	No of trades	Open interest (No of contracts)
BSXJUN2000	4755	4820	4740	4783.1	146	348.70	104	51
BSXJUL2000	4900	4900	4800	4830.8	12	28.98	10	2
BSXAUG2000	4800	4870	4800	4835	2	4.84	2	1
Total					160	38252	116	54

Source: BSE

·         The first column explains the series that is being traded. For e.g. BSXJUN2000 stands for the June Sensex futures contract.

·         The column on volume indicates that (in case of June series) 146 contracts have been traded in 104 trades.

·         One contract is equivalent to 50 times the price of the futures, which are traded. For e.g. In case of the June series above, the first trade at 4755 represents one contract valued at 4755 x 50 i.e. Rs. 2,37,750/-.

Open interest indicates the total gross outstanding open positions in the market for that particular series. For e.g. Open interest in the June series is 51 contracts.
The most useful measure of market activity is Open interest, which is also published by exchanges and used for technical analysis. Open interest indicates the liquidity of a market and is the total number of contracts, which are still outstanding in a futures market for a specified futures contract.
A futures contract is formed when a buyer and a seller take opposite positions in a transaction. This means that the buyer goes long and the seller goes short. Open interest is calculated by looking at either the total number of outstanding long or short positions – not both.
Open interest is therefore a measure of contracts that have not been matched and closed out. The number of open long contracts must equal exactly the number of open short contracts.

Action	Resulting open interest
New buyer (long) and new seller (short) Trade to form a new contract.	Rise
Existing buyer sells and existing seller buys –The old contract is closed.	Fall
New buyer buys from existing buyer. The Existing buyer closes his position by selling to new buyer.	No change – there is no increase in long contracts being held
Existing seller buys from new seller. The Existing seller closes his position by buying from new seller.	No change – there is no increase in short contracts being held

Open interest is also used in conjunction with other technical analysis chart patterns and indicators to gauge market signals. The following chart may help with these signals.

Price	Open interest	Market
UP	UP	Strong
UP	DOWN	Warning signal
DOWN	UP	Weak
DOWN	DOWN	Warning signal

The warning sign indicates that the Open interest is not supporting the price direction.