By Rajesh Palviya
In Nifty present series, a Long addition has been witnessed with an improve in price tag of 2.88% and improve in OI by 32.90% as on Wednesday wherein there was addition of 29.02 lakh shares in OI, growing from 88.24 lakh to 117.27 lakh shares. Nifty August rollover stands at 9.70% whilst Nifty Put Call Ratio, a sentiment indicator employed by traders to gauge the market place sentiment and mood, is at present at 1.53 compared to 1.16 of last week, indicating positive bias with caution at larger levels.
India VIX, a market place volatility indicator frequently referred to as the worry gauge, is at present trading 13.21% compared to 12.94% of last week. Implied Volatility of Nifty ATM choices for the present series is at 13.44% in contrast to 12.09% of last week, indicating marginal volatile movement on either side in coming session.
Nifty Put choices OI distribution shows that 16,000 has highest OI concentration followed by 15,900 and 16,200 which may possibly act as help for present expiry and on the Call front 16,300 followed by 16,400 & 16,500 witnessed substantial OI concentration and may possibly act as resistance for present expiry.
In weekly choices there was Call writing seen at 16,400 strike followed by 16,300 and 16,350 whilst on the Put side noticeable activity of writing was witnessed in 16,000 and 16,200 strike costs. Options information recommend an quick trading variety in between 16,400 and 16,one hundred levels.
Nifty Open Interest Concentration
Nifty Open Interest Change
Bank Nifty Outlook
In present series, a Short Covering has been witnessed in Bank Nifty Futures with an improve in price tag of 3.62% and lower in OI by -11.05% as on Wednesday wherein there was unwinding of 2.17 lakh shares in OI, decreasing from 19.61 lakh to 17.44 lakh shares. Bank Nifty August rollover stands at 6% whilst Bank Nifty Put Call Ratio, a sentiment indicator employed by traders to gauge the market place sentiment and mood, is at present at 1.23 compared to .79 of last week indicating positive bias with caution.
Bank Nifty Put choices OI distribution shows that 35,000 has highest OI concentration followed by 35,500 which may possibly act as help for present expiry and on the Call front 37,000 followed by 36,000 and 36,200 witnessed substantial OI concentration and may possibly act as resistance.
In weekly choices Call writing was seen at 36,000, 36,200 and 37,000 strike whilst on the place side it was seen at 35,500 and 35,000. Options information indicated an quick trading variety in between 35,000 and 36,500 levels.
Bank Nifty Open Interest Concentration
Bank Nifty Option OI Change
Nifty 50 trading method for expiry day
The higher open interest concentration in Nifty on 5th August 2021 expiry is at 16300 Call and 16200 Put is indicating variety bound movement on Thursday and to take benefit of the identical we are suggesting a method referred to as Brief STRADDLE. This method includes promoting of (ATM) Get in touch with & Place one lot each and every of 16,250 strike possessing premium of 46 and 44 respectively garnering in total inflow of Rs. 4,500 (90 points). As it is a credit spread from profit point of view this method will produce maximum profit of Rs 4,500 restricted to total premium received if Nifty closes specifically at the sold strike i.e 16,250 on expiry nevertheless, incase if Nifty breaches the upper breakeven level of 16,340 or the decrease breakeven level of 16,160 then the loss can be practically limitless and therefore it is advisable to keep a combine premium (i.e add premium of contact + place collectively) quit loss of 130-140 points so that if due to any purpose if there wide movement in Nifty the exposure of limitless loss can be curtailed.
The method will produce earnings if Nifty remains in the variety of 16,150 to 16,350 till the expiry and also closes in between the identical as the THETA or TIME DECAY of choices will work doubly in our favour ultimately creating it a finest-case situation as we attain closer to expiry day on each and every passing hour.
(Rajesh Palviya is Vice President– Research (Head Technical & Derivatives) at Axis Securities Limited. The views expressed are the author’s personal. Please seek advice from your economic advisor prior to investing.)