By Rajesh Palviya
In Nifty current series, there has been a Long Addition witnessed with an increase in price of 1.33% and an increase in OI by 11% as on today wherein there was addition of 12.23 Lac shares in OI, increasing from 111.90 lac to 124.13 Lac shares. Nifty current month rollover stands at 11% as on today, while Nifty Put Call Ratio a sentiment indicator used by traders to gauge the market sentiment and mood is currently at 1.55 compared to 1.38 of last week, indicating a Flat-to-Cautious movement for expiry. India Vix a market volatility indicator often called the “fear gauge“ is currently trading 13.81% compared to 13.48% of last week.
Implied Volatility of Nifty ATM options for the current series is at 12.59% in contrast to 12.24% of last week, indicating low movement on either sides in expiry session. Nifty Put options OI distribution shows that 18,600 has highest OI concentration followed by 18,500 & 18,400 which may act as support for current expiry and on the Call front 19,000 followed by 18,900 & 18,800 witnessed significant OI concentration and may act as resistance for current expiry. Options data suggest an immediate trading range between 18,600 and 18,900 levels & 17,000 acting as the pivotal level. In Nifty, Call writing was witnessed at 18,900, 18,800 & 19,000; while on Put side, it was seen at 18,500, 18,600 &18,700
Nifty Open Interest Concentration
Nifty Option OI Change
Bank Nifty Outlook
In current series, there has been a Short Covering witnessed in Bank Nifty Fut with an increase in price of 0.39% and decrease in OI by 7% as on today, wherein there was shedding of 2.16 Lac shares in OI, decreasing from 30.38 Lac to 28.22 Lac shares. Bank Nifty Current series rollover stands at 10% as on today, while Bank Nifty Put Call Ratio a sentiment indicator used by Traders to gauge the market sentiment and mood, is currently at 1.03 compared to 1.31 of last week indicating Flat-to-Positive movement for expiry.
Bank Nifty Put options OI distribution shows that 43,000 has highest OI concentration followed by 42,500 & 42,000 which may act as support for current expiry and on the Call front 43,300 followed by 43,500 & 44,000 witnessed significant OI concentration and may act as résistance. Options data indicated an immediate trading range between 42,800 and 43,700 levels. On weekly basis, significant Call writing in Bank Nifty was seen at 44,000, 43,500 & 43,300 strike while on put side, it was seen at 43,000, 43,200 & 42,500.
Banknifty Open Interest Concentration
Banknifty Option OI Change
In this coming week, traders can initiate a Moderately Bullish strategy with reduced premium outflow & lower breakeven point called BULL CALL SPREAD of 8 December expiry wherein traders can buy one lot of 18,850 call strike at 89 and simultaneously sell one lot of 19,000 call strike at 39, so that net outflow or maximum loss will be restricted to up to Rs 2,500. Nifty on expiry if closes above the breakeven point of 18,900 the strategy will start making profits. The maximum gains will be restricted up to Rs 5,000 because the gains of long 18,850 strike call will be offset by the sold 19,000 strike call if Nifty closes above 19,000 on expiry.
(Rajesh Palviya, Vice President – Research ( Head Technical & Derivatives), Axis Securities. Views expressed are the author’s own.)