One question that pops up in investors and traders mind every now and then without discrimination and bias is: Which stock is better for investment or trading? Let's try to figure out the answer to this question in common sense way. By common sense way, we mean using steps that are simple, elegant and backed by data. To reach a conclusion, we will use a simple parameter i.e. Security Wise Delivery Percentage of stocks traded on NSE. We believe, most of you are already familiar with this parameter, however to be fair with unaware, let me give a brief description of what it is:
Security Wise Delivery Percentage is the ratio of total delivered quantity to total traded quantity for a particular stock on a given trading day.
Generally speaking, if more people are interested in taking the delivery of a particular stock while the prices are rising, it's indicator of strength (high demand). Similarly, if the delivery percentage of stock is high while the price is falling, it indicates weakness (high supply). Having said that, if the delivery percentage of a particular stock has historically been on lower side (say less than 20%), it falls into the category of speculative stock (short term trading interest).
Speculation intuitively is more risky, meaning chances of losing capital in short and long term is high.
To better differentiate between investment grade and speculative stocks, let's plot the average security wise delivery percentage for last one year of all NSE stocks. The chart below gives you a high level overview of the distribution of Security wise delivery percentage which ranges from less than 10% to up to 100% for some stocks. No doubt, the data is overwhelming as the plot covers more than 1500 stocks trading on NSE.
So how to draw some meaningful inference? Let's decrease the basket size and plot the average security wise delivery percentage for last one year of all FnO stocks traded on NSE. Again generally speaking, stocks which trade in FnO have relatively lower delivery percentage as compared to other stocks as by very nature of it, FnO stocks leave a huge scope for speculation and intraday trading. In this backdrop, first focus on the names appearing in the left side of the chart (Stocks with delivery percentage less than 20%) and then focus on the right side i.e. stocks consistently having delivery percentage > 50%. I am sure you can very well identify some famous wealth destroyers and wealth creators of recent past appearing in these two areas.
If you want to do further sectoral analysis, you can do the same below. Just select the sector from the drop down to plot sectoral index stocks security wise delivery percentage.
Let's change gears and get stock specific while simultaneously figuring out how to best use delivery percentage data for maximum gains.
Careful analysis of price and security wise delivery position data can help investors in predicting future price movements. It does qualify as an interesting confirmatory parameter to validate our investment decisions. Let's say you have identified stock A for investment at a price P based on fundamental and technical analysis. To be doubly sure of your decision, just have a look at the history of security wise deliverable percentage of the particular stock. Why? Hear this:
A low deliverable quantity or delivery percentage over a period of time (few days to a month) is indicative of a high intraday activity (Buying in the morning and selling in the evening or vice versa). This means that the current price trend (either up or down) is dubious and will be short lived.
Similarly, a high deliverable quantity or delivery percentage over a period of time (few days to a month) is indicative of positional or long term activity i.e. buying and holding for long term (bullish) or selling and getting out of the stock completely (bearish). This means that the current price trend (either up or down) is going to sustain for relatively longer period.
While analyzing the security wise delivery percentage data, try to map your finding with following decision table a.k.a. thumb rules:
|Price||Delivery Percentage||Price Prediction||Investment Decision|
|Rising||Rising||Price uptrend is likely to sustain||Buy|
|Rising||Falling||Price uptrend might not sustain||Sell|
|Falling||Rising||Price downtrend is likely to sustain||Sell|
|Falling||Falling||Price Downtrend might not sustain||Buy|
Let's have a look at all the stocks (FnO and non FnO) falling into above categories. We have done this categorization based on approximately last 3 months (60 trading days) price and delivery data. However, you can visualize data for other time frames too below. You can click on individual rows in tables below to get the detail view of price, security wise delivery position, volume (total traded quantity) and total number of trades. Before you start playing around, one common sense pointer about total traded quantity (volume) and total number of trades data:
High volume with low total number of trades indicates activity by institutional players, whereas low volume with high total number of trades indicates activity by retail players
A comparative analysis of daily and average figures will give you a fair idea about who the players are. The detail view has the average figures for price, delivery percentage, volume and total number of trades. You are all set to go now:
Price and Security Wise Delivery Trends of FnO Stocks
Price and Security Wise Delivery Trends of Non FnO Stocks
Hungry for more? If you do not find the stock of your interest above, the drop down below enables you to plot price, security wise delivery percentage, total traded quantity and total number of trades data of individual NSE stocks for past 1 week, 1 month, 3 months and 1 year period. For people who have deep interest in trading and who wants to do a correlation analysis on security wise delivery trend and combined open interest of future contracts (to validate whats being observed in cash market is also getting reflected in futures market), we have also included a plot of price and future contracts combined open interest (this will load with data only for stocks which trade in FnO). With the visual chart, you can very well interpret the underlying trend and spot the anomalies in price movements. So please help yourself.
Plot Security Wise Delivery Position
Note* - The data on this page comes from what we have in our database and is not complete plus there might be inaccuracy in the numbers shown in the tables and charts above. So use this data for analysis purpose only and do not treat it as any recommendation to invest. Also do a second level check for data accuracy from direct sources like NSE and BSE.