Top Stocks to Watch in the August FnO Series: Vedanta, HDFC Bank, Polycab, Trent and More

The Indian F&O market has been buzzing with rising activity in recent years. Even with the recent changes in the Union Budget 2024, traders continue to remain involved in the derivatives segment because of the high liquidity and profit potential it offers. For F&O traders in India, the August F&O series is of particular interest because it is due for expiry in a few days. 

If you are looking for insights to help you leverage the near-month F&O series to your advantage, this article can offer you some crucial information. Check out more about the top securities in focus — like Vedanta F&O, HDFC Bank F&O and Polycab F&O, among others.

An Overview of the August F&O Series in India

Historical data reveals that trading in the August F&O series began with unprecedented open interest (OI) levels. This set the stage for increased trader engagement and potentially higher market activity and volatility during the month. The rollover from July to August was marked by high momentum in most derivatives — but the Nifty series was the only exception.

Nifty futures, in particular, witnessed a drop of 1% in the open interest. However, experts and analysts saw no reason to panic because market activity remained high — leading to an opening forecast of a choppy yet bullish market. Long build-ups were expected in the FMCG, oil & gas, chemicals and pharma sectors, while short build-ups were forecast for metals and banking stocks. 

Traders interested in the August F&O series must be aware of the new contract expiry norms, which have specific expiries scheduled for each day of the week. More specifically, this is how the expiry calendar looks for the August F&O series:

Top Stocks to Monitor in the August 2024 F&O Series 

If you are interested in trading the F&O series of individual securities rather than index derivatives, it helps to know which stocks are in focus. This way, you can capitalise on the increased activity and liquidity in those derivatives. This month, the following securities have remained in the spotlight for different reasons:

• Vedanta

Vedanta has historically always been a newsmaker for many reasons. More recently, the company’s stock made it to the F&O ban list in July 2024. However, the Vedanta F&O series continues to remain a hot favourite among traders eager to capitalise on some increased trading activity. 

Open interest in the Vedanta F&O series continues to remain high, particularly for the 430 strike price contract that has OI levels of 2,000+ on both sides (as of August 13). Open interest changes also continue to remain healthy, indicating high levels of trading activity on this stock. If you want to add the Vedanta F&O series to your watchlist, ensure that you perform the required due diligence and technical analysis before you enter the market. 

• HDFC Bank

Despite the poor prognosis for the banking sector’s derivatives segment in August, HDFC Bank was expected to be the outlier this month. Now that we are in the thick of the month, the HDFC Bank F&O series has proved the forecast right. The recent changes to the MSCI equity index put the bank in focus among traders. 

While HDFC Bank’s weightage in the MSCI Global Standard Index is poised to increase as anticipated, the addition will occur in two batches rather than one. This being unexpected, the bank’s shares dropped by over 3.5% on August 13. However, activity in the HDFC Bank F&O series continues to remain significantly high, with strikes like 1,650 and 1,700 witnessing OI levels of 13,000+ and 23,000+ respectively (as of August 13). 

• Trent 

Retail giant Trent has been in the news in recent weeks because of its potential addition to the Nifty 50 index. With the company poised to join the big leagues, trading activity in its derivatives segment has been growing. Experts foresee inflows of $500 million in the retail company if the stock becomes a part of the benchmark index. 

The index is rebalanced twice a year — on January 31 and July 31. The results of the July rebalancing will likely be announced in the latter half of August and the index will be adjusted on September 30. If Trent makes it to the list, its F&O series could be poised for unprecedented trading activity. 

• Polycab (and Other Seasonal Stocks)

Polycab, Crompton, Havells and ABB are also among the top stocks to watch in the derivatives segment. Experts recommend a long bias for these stocks because of their impending seasonal importance. Both the festive season and the monsoon could drive demand in these sectors at the domestic and industrial levels. 

The Polycab F&O series has been showing increased OI at strikes like 7,000 (on the call side) and 6,100 (on the put side) as of August 13. Other seasonally relevant industrial stocks in this category are also high on investor watchlists. 

Conclusion

With the expiries of different derivatives in India’s F&O series distributed across various days of the week, traders gunning for some last-minute trades before the August 2024 contracts expire need to monitor the markets closely and plan their trades well. Live market data is crucial for developing effective trading strategies. 

Fortunately, whether you are planning to trade in HDFC Bank F&O, Vedanta F&O, Polycab F&O or any other derivatives, Motilal Oswal’s Research 360 Platform makes it easy to find relevant and up-to-date market data. From snapshots of the top market movers and rollover data to a comprehensive heatmap of the different F&O series and live options chains, the Research 360 platform offers everything you need to make smart trading decisions in the derivatives market.