Let's talk!

Time to hedge your positions, deploy Bear Put Spread on Nifty

  • click to rate

    The Nifty failed to hold onto 12,000 and closed last week flat but above 11,900 levels. The Bank Nifty had a better last week and ended over a percent higher.

    Open interest (OI) activity for both indices was on the positive side, though with more longs than shorts. The Bank Nifty added over 70 percent OI last week.

    Stock futures were not so fortunate, with 70 out of the 148 participating stocks adding shorts. The stocks that did see long interest were also from the pack that has seen short-covering recently.

    Most stocks reaching the list of longs last week were the result of bargain hunting attempts in beaten-down names.

    Sentimentally, Open Interest Put Call Ratio (OIPCR) held on last week. But the weakness on November 8 pushed the OIPCR down to 1.26, down around 20 bps week-on-week. On the other hand, India VIX was awfully quiet for the week-ended November 8, hovering below 16.

    Among individual Nifty strikes, 12,000 remains the undivided consensus for the upside hurdle. What’s scarier though is consensus despite the proximity to that level. On the lower side, congestion remains firm in the 11,700-11,500 zone.

    For Bank Nifty, this time the options composition seems better off with a better OIPCR. The congestion on the upside at 31,000 levels is relatively lower than Put supports by lower strike writers at 30,000.

    Read More...