Analyzing the strategy for new FnO entrants

I was trying to run some numbers to see if the strategy of locking in profit after new stocks make their entry into FnO is working. Except in case of Ispat Industries & WWIL, the strategy would not have worked. If someone accumulated stocks on 28^th Nov (after announcement) and 29^th Nov, the acquisition cost of Ispat Industries is Rs 46 while that of WWIL is Rs 61. This is taking high values on both days for conservative estimates. If someone shorts the futures of these stocks the profit lock in is to the tune of 14% & 11% respectively. If the acquisition of stock is done on 28^th Nov itself, the returns increase to over 20% & 16% respectively. Incase of Info Edge, GBN & MICO, the returns are negative. For Info Edge it is -10%, for GBN & MICO it is -6%. The other stocks are lack luster.

This deviation from the usual strategy may be because of two factors. One is that the time period between announcement & listing in FnO decreased drastically to less 48 hours. Two, as the strategy has become popular, people immediately flock on stocks that jack up to hit circuit filters in just few minutes.

My take is that, one should select fundamentally strong stocks and preferably the ones with stock price less than Rs 100. This is because the stocks with sub 100 price levels have good trading interest thus moving prices positively. This is why you see Ispat & WWIL looking strong in todays trade after they got listed in F&O market.