High frequency trading firms on January 11 were active in HCC, Polycab India, ImagicaaWorld Entertainment making a quick buck by flipping trades in seconds. While Polycab India plunged, HCC and ImagicaaWorld Entertainment touched 52-week highs.
High-frequency trading firms (HTFs) – or algo firms on steroids –use complex algorithms and powerful computers to execute trades at lightning speeds. These firms typically try to capture the spread between the spot and futures prices, but recently they have been active in small, illiquid stocks as well.
The volumes generated by them, more often than not, attracts retail investors to these stocks.
Stocks where HFTs were active on January 11:
HCC
Active names and traded stake: Graviton Research Capital (0.62 percent), HRTI Private Limited (0.84 percent), Citadel Securities (0.22 percent),
Stock movement and volumes: Gained 9.58 percent to Rs 34.9. Trading volumes at 18 crore shares versus 1-month average of 5 crore shares
Technicals: Stock is above 50-DMA and 200-DMA
Fundamental trigger, if any: HCC's subsidiary Steiner AG is going to divest its entire stake in a French company for Rs 928 crore. The deal will be completed in December this year.
Polycab India
Active names and traded stake: Graviton Research Capital (0.8 percent), NK Securities Research (0.46 percent)
Stock movement and volumes: Down 21.04 percent to Rs 3878.45. Trading volumes at 2 crore shares versus 1-month average of 16 lakh shares
Technicals: Stock is above 50-DMA and 200-DMA
Fundamental trigger, if any: The Income Tax department detected unaccounted cash sales of about Rs 1000 crore after it raided the Polycab group.
ImagicaaWorld Entertainment
Active names and traded stake: Graviton Research Capital (0.55 percent), Jainam Broking (0.33 percent)
Stock movement and volumes: Gained 19.98 percent to Rs 71.45. Trading volumes at 3 crore shares versus 1-month average of 58 lakh shares
Technicals: Stock is above 50-DMA and 200-DMA
Fundamental trigger, if any: The company received a licence from Bureau of Indian Standards for maintaining highest quality standards on January 11.
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