FII Activity

FII/FPI meaning? FII/FPI DII trading activity?

FII/FPI and DII are Foreign Institutional Investor/Foreign Portfolio Investors and Domestic Institutional Investor. FII/FPI are foreign investors registered under SEBI and eligible to invest in the Indian market or trade-in NSE, BSE exchange. FII/DII are large fund houses that invest in large quantities, influencing the market. This big player/smart player has large analyst team who understand market movement and investment. DII are domestic investors like mutual funds. FII DII buys good quality stock, mostly from the NIFTY 50 stock list

Why track FII/DII Trading Activity?

We often hear about new retail investors losing money in the stock market. It continues to happen until new retail investors do not get the edge of the stock market. We frequently hear about Foreign Institutional Investors (FIIs), Domestic Institutional Investors(DII) buy/sell activity impacts the stock market but exactly how is misty for the retail investor. FII, DII has big money and they can influence the market. To understand what stock FII, DII buying or selling a couple of fundamentals need to understand to track daily data. FII, DII is also referred to as smart money.

Whenever smart money takes a position in the market, It gets reflected into the number of trade, volume, open interest in a security for a day.

Let's understand better with the below example below,

Retailers buy 240 quantities in 4 trade/orders; however, smart money buys just in two trades with the same volume because they will have significant capital/purchasing power. If we get the ratio of (traded quantity/trade), the ratio will be high for the day if FII has bought. FII, DII control market with three instrument cash and derivative (option, future) products. If they buy in derivate, it will impact the open interest, also called log build up. In the cash market, they control stock by taking delivery of stock. Derivative provides a good margin so that they will get a large quantity in a small amount. So far, it is clear that if we track traded quantity, open interest and change in price, it will be much easier to track the buying or selling range to FII/DII.

Let's understand a few fundamentals on the open interest,

We are more interested in buying stock as a retail investor selling option always requires good capital. The below table gives composite conditions to track FII activity. Based on % of price change and % of open interest change, we can see what the market trend is - Long Buildup, Short Covering considered as bullish and Long Unwinding, Short Buildup consider as bearish position. #FIIActivity

Foreign Portfolio Investors (FPIs) declare FII was buying and selling in a particular sector for the last 15 days. This sector will provide us the opportunity to find a good quality stock in the sector. We can find FII/FPI historical data on how much buying/selling is done by big players.

How to understand what day, What price range FII/FPI, DII made a position?

Find sector where FII has continued buying from last one, two months or quarter
Find the list of stocks that belong to buying sector
Find the FII/DII buying a stock list from the top table of FII Activity page
Find High Delivery %, Action, % OI Change for stock and mark closing price of the stock
Once there will be continued long build up from a couple of days indicate that FII/DII making position in the stock
This will be a price range where the retailer can also buy on a breakout and earn 15-25 % of the move with a market pattern

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