High-frequency trading firms on January 8 were active in Sula Vineyards, South Indian Bank and Urja Global among many other stocks, making a quick buck by flipping trades in seconds. While Urja Global and Sula Vineyards rallied to their 52-week highs, South Indian Bank closed lower.
The 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 8:
Sula Vineyards
Active names and traded stake: Aakraya Research (0.7 percent), NK Securities (0.6 percent), Graviton (1.3 percent) and QE Securities (0.6 percent)
Stock movement and volumes: Gained 19.42 percent to Rs 662.05. Trading volumes at 2 crore shares versus 1-month average of 19 lakh shares
Technicals: Stock is above 50-DMA and 200-DMA
Fundamental trigger, if any: The Maharashtra government has reinstated subsidy on wines. CLSA has a target of Rs 863 per share on the stock
South Indian Bank
Active names and traded stake: Jainam Broking (0.7 percent), Pace Commodity (0.7 percent)
Stock movement and volumes: Fell 1.4 percent to Rs 26.70. Trading volumes at 6 crore shares versus 1-month average of 4 crore shares
Technicals: Stock is above 50-DMA and 200-DMA
Fundamental trigger, if any: A week back, the bank reported its Q3 gross advances at Rs 77,713 crore, up 11 percent YoY. Stock has been flat since.
Urja Global
Active names and traded stake: Graviton (2.1 percent), QE Securities (1.46 percent), Citadel Securities (1 percent), HRTI Limited (3.8 percent)
Stock movement and volumes: Gained 9.9 percent to Rs 18.80. Trading volumes at 12 crore shares versus 1-month average of 4 crore shares
Technicals: The stock is above 50-DMA and 200-DMA
Fundamental trigger, if any: No
Balaji Telefilms
Active names and traded stake: Graviton Research (1 percent)
Stock movement and volumes: Gained 10.3 percent to Rs 90.45. Trading volumes at 83 lakh shares versus 1-month average of 12 lakh shares.
Technicals: The stock is above 50-DMA and 200-DMA
Fundamental trigger, if any: No
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