Signaling in CNX Nifty Futures: A Perceptual Approach‪.‬

Introduction The Indian futures trading system exists with passive day orders through the hierarchy of clearing members, branch managers, dealers, brokers and sub-brokers. Depending on the valid order entry in the market, clearing entities execute orders with clearing and settlement process. Here apart from the leveraging activities of derivatives instruments, one can benefit from both a downturn as well as an upturn market situation. Therefore, one can make money in both bull and bear market situations. However, the pathetic situation is that the above opportunity is not available to all of the market participants like investors, dealers, brokers, sub-brokers and market operators. This is also not easily and conveniently accessible to the retail investors. This leads to the autonomy, accountability, and transparency issues. In this context, the trading behaviour in asymmetric information situation is matter of concern. The market participants' trading behaviour affects the market making. Hence, it is pertinent to understand their strategies. These market strategies have a direct bearing on valuation. Moreover, the informational gap among the market participants is a cause of concern.