HFT Scan: Algo traders zoom in on Axis Bank and Dr Reddy’s Laboratories

High-frequency traders were active in Axis Bank, Dr Reddy’s Laboratories, and Larsen & Toubro counters on March 26. Axis Bank and L&T closed higher.

High-frequency trading firms (HTFs) – or algo firms on steroids –use complex algorithms and powerful computers to execute trades at lightning speeds. These firms typically try to capture the spread between the spot and futures prices, but recently they have been active in small, illiquid stocks as well.

The volumes generated by them, more often than not, attracts retail investors to these stocks.

Stocks where HFTs were active on March 26 :

Axis Bank
Active names and traded stake: BOFA Securities Europe SA (0.16 percent)
Stock movement and volumes: Gained 0.7 percent to Rs 1040.55. Trading volumes at 1 crore shares versus 1-month average of 91 lakh shares
Technicals: Stock is below 50-DMA and 200-DMAFundamental trigger, if any: The lender on March 26 allotted 4,25,920 equity shares of Rs 2 each to exercise of stock options under its ESOP Scheme

Dr Reddy’s Laboratories
Acive names and traded stake: BOFA Securities Europe SA (0.16 percent)
Stock movement and volumes: Lost 1.1 percent to Rs 6134.85. Trading volumes at 5 lakh shares versus 1-month average of shares 3 lakh shares
Technicals: Stock is above 50-DMA and 200-DMAFundamental trigger, if any: NA

Larsen & Toubro
Active names and traded stake: BOFA Securities Europe SA (0.14 percent)
Stock movement and volumes: Gained 1.45 percent to Rs 3670.1. Trading volumes at 29 lakh shares versus 1-week average of 24 lakh shares
Technicals: Stock is above 50-DMA and 200-DMAFundamental trigger, if any: The company’s board on March 26 approved a proposal to raise funds worth Rs 7,500 crore.