Security wise delivery position is the data related to price, total traded volume and delivered volume provided by NSE and BSE on daily basis for particular stock that trades on these exchanges (see the snapshot data of security wise delivery position data for HDFC bank in the figure below). NSE and BSE, also gives the figure of deliverable positions as a percentage of total traded volume (the last column in figure below) and from stock market investment perspective it’s quite interesting to interpret the relationship between price movement and delivery percentage.

  security wise delivery position

The hidden story

Stocks are quite vulnerable to price manipulation by speculators, traders and people with deep pocket but not so noble motives. The situation gets worse if the target stocks average trading volume is low. This price manipulation could be upward or downward all at the cost of innocent retail investors who normally are trapped into buying high and selling low. For example, let's say someone with vested interest buys a particular stock in large quantity at market open (leading to sharp price rise that in turn attracts a lot of retail investors) and sells all the stocks near market close on the same day at a higher price. He is out with a decent profit, but retail investors who bought on price up move are left stuck as the higher price doesn’t sustain.

Smart Analysis

The above scenario is quite real and gets repeated quite often, but one cannot spot it just by analysing price and volume data alone. By just looking at price and volume data, one will reach to a not so real conclusion of “price is up and the traded volume is up, so the price rise will sustain”. Now, as we know the hidden story, we need to be a little cautious while making investment decisions. Security wise delivery position statistics can prove quite handy here, particularly the price, delivery quantity and delivery percentage data. There are quite a lot of implications of this data, but the thumb rule is:

  1. A low deliverable quantity or delivery percentage 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
  2. A high deliverable quantity or delivery percentage 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 analysing the data one should attach more weight to delivery percentage as compared to delivery quantity. Sometimes delivery quantity data can be misleading. Consider a case when the target company issues more stocks on a particular day. From that day onwards one might witness abnormal spurt in delivery quantity even though this spurt will not have much significance (as the number of stocks has increased so has the delivery quantity). This abnormal spurt is significant from the investment decision perspective or not can be well spotted by studying the delivery percentage data. If the delivery percentage remains the same as earlier, then the spurt is of no significance. But if we witness a significant change in delivery percentage then the stock requires a second thought.

Just to help investors, we at equityfriend have created a price and security wise deliver position plotting tool (both for single stock and index wise) where you can plot the data for last one month. You can try the tool by going to Security Wise Deliverable Position. We want to improve the tool and would appreciate your feedback on the same.

 

Data Interpretation and Investment Decision

 

security wise delivery position analysis

Careful analysis of price and security wise delivery percentage data can help investors predict the future price movements of a particular stock. The table above summarises the way investors should take actions based on security wise delivery position data. 

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