Option sellers signal bullish trend for Nifty

MUMBAI: A shift in the Nifty trading range by option sellers signals continued market momentum, with bulls likely to aim for the record high of 15,431.75 — made on February 16 — this week, said derivatives analysts.

Option writers or sellers on Friday shifted the trading range to 15,000-15,500 from 14,600-15,000 as the Nifty conclusively broke key technical retracements of 14,943 and 15,158. At Friday’s close of 15,175.3, the index was just 1.7 per cent away from its lifetime high.

Option writers are normally market veterans who sell call and put options on indices and stocks in exchange for premiums from buyers. The premium or option price is their maximum gain, while their losses can be unlimited. This is why the levels at which they sell maximum puts and calls are tracked closely in market circles.