Saturday trading mood: Lack of volume, spikes on counters and abrupt option pricing on expiry shift

The surprise full-day trading session on January 20 was marked by a lack of volume, spikes on counters, and arbitrage opportunities resulting from a shift in expiry. The Nifty 50 fell into a bear trap during the last couple of hours of the session as bulls failed to hold their ground.

The market mood remained abrupt as some traders discovered that the sudden announcement of a full-day trading session affected their trading strategies. The premium pricing behavior was also abrupt, as the market had not discounted the preponed session.

According to Arun Kumar Mantri, Founder of Mantri Finmart, "Markets have been lackluster, with moves being more pronounced on the stock-specific front, focusing entirely on corporate earnings and new developments among the counters."

He highlighted that overall volumes were on the dry side among large caps, and the action was more prominent in the mid and small-cap space. "Due to the shift in BANKEX and MIDCAP INDEX options expiry from Monday, there was a definite one-day time decay, impacting options pricing, which came in lower. Trading strategies for options traders were also affected."