5 cues from F&O mart: Nearly 14 lakh contracts added in Call OI

NEW DELHI: The Nifty50 closed below its crucial support level of 8,100 on Tuesday and fresh Call writing at strike prices 8,100 and 8,200 is likely to limit further upside, options data showed.

Put option activity: Put writing was seen at strike price 7,900 (2.8 lakh contracts added) while Put unwinding was seen at strike prices 8,000 (5.2 lakh contracts shed), 8,200 (2.5 lakh contracts shed), and 7,500 (2.1 lakh contracts shed).

Total Put open interest of 68.71 lakh contracts stood at strike price 8,000, which will act as a crucial base for the market in the December series, followed by strike price 8,100, which saw accumulation of 47.33 lakh contracts, while 7,900 had 39.73 lakh contracts in open interest.

“On the options front, maximum Put OI was seen at strike price 8,000 followed by 8,100 while maximum Call OI was seen at strike price 8,300 followed by 8,200,” Chandan Taparia, Derivatives & Technical Analyst for Equity Research at Anand Rathi Financial Services, told ETMarkets.com.

“Put writing was intact at strike prices 8,000 and 8,100, which may hold the market on any decline while significant Call writing was seen at strike price 8,100, which is keeping the upside limited,” he said.

Taparia said the market got stuck between option writers and that is why it is not seeing any major movement on either side.




Call option activity: Fresh Call writing was seen at strike price 8,000 (1.7 lakh contracts added), followed by 8,100 (13.96 lakh contracts added) and 8,200 (1.79 lakh contracts added).

The maximum Call open interest of 60.67 lakh contracts stood at strike price 8,300, which will act as a key resistance for the index in the December series, followed by strike price 8,200 which has accumulated 52.66 lakh contracts, while strike price 8,500 had 41.54 lakh contracts in open interest.

PCR: The Nifty50 Put-Call ratio (PCR) closed above 1 at 1.02. A PCR above 1 is considered bullish while a PCR below 1 is considered bearish.

India VIX: The India Volatility Index (VIX), a gauge of the market’s short-term expectation of volatility, contracted by 2.02 per cent to 14.53 on Tuesday compared with 14.83 recorded in the previous session.

Nifty Bank: The Nifty Bank underperformed the Nifty50 index and broke its immediate support level of 18,150. It has been consolidating in the range of 18,150 to about 18,700 from the last twenty trading sessions.

“If Nifty Bank fails to surpass the 18,150 mark, then it may drift towards 17,800 and the towards 17,500 while on the upside immediate hurdles are seen at 18,350, 18,500 and 18,700 levels,” Taparia said.