F&O view: Call writing, unwinding of Puts likely to keep market rangebound

NEW DELHI: The Nifty50 reclaimed its crucial support level of 8,150 on Friday morning, but fresh Call writing and Put unwinding at 8,000-8,200 levels is expected to keep the market rangebound, options data showed.

Fresh Call writing was seen at strike prices 8,000 (1.8 lakh contracts added), 8,100 (1.3 lakh contracts added), 8,200 (2.98 lakh contracts added) and 8,300 (2.6 lakh contracts added).

Total Call open interest of 61.25 lakh contracts still stands at strike price 8,300, followed by 8,400, which has accumulated 47.5 lakh contracts in open interest, and also strike price 8,500, which has 46.89 lakh contracts in open interest.

Put unwinding was seen at strike prices 8,000 (6.1 lakh contracts shed), 8,100 (3.5 lakh contracts shed), 8,200 (6.6 lakh contracts shed), 8,400 (2.1 lakh contracts shed) and 8,500 (1.4 lakh contracts shed).

“We have seen fresh Call writing at all strike prices between 8,000 and 8,500 levels and Put unwinding at strike prices 8,000 and 8,300,” Chandan Taparia, Derivatives Analyst - Equity Research, Anand Rathi Financial Services, told ETMarkets.com.

“Fresh and meaningful Call writing along with Put unwinding is not presenting a rosy picture, which may keep the market rangebound and sustain pressure at every hurdle,” he said.



Maximum Put open interest of 74.76 lakh contracts still remains intact at strike price 8,000, followed by strike price 8,100, which has 45.91 lakh contracts, and also strike price 7,900, which has 36.49 lakh contracts in open interest, options data collated on Thursday showed.

For the third consecutive session, foreign institutional investors (FIIs) were net sellers in both cash market and index futures. They sold equities worth Rs 157 crore. In index options, they sold positions worth Rs 1,144 crore with a marginal rise in open interest.

“In index futures, they sold positions worth Rs 440 crore with a decline in open interest, indicating long unwinding in last trading session,” Angel Broking said in a note.

“We reiterate our view that as long as we don’t see any fresh buying by FIIs in index options, Nifty may continue to remain rangebound between 8,000 and 8,300 levels. One should remain light on positions and wait for further cues,” said the note.