By Rajesh Palviya
In Nifty existing series there has been a Short Covering witnessed with raise in cost of 6.37% and lower in OI by 48% as on today wherein there was unwinding of 59 Lac shares in OI, decreasing from 123.97 lac to 64.89Lac shares there was addition of 25.74 Lac shares in OI in next series, the important OI lower is due to month-to-month expiry scheduled tomorrow whilst today Nifty September rollover stands at 58% as on today and Nifty Put Call Ratio a sentiment indicator applied by Traders to gauge the marketplace sentiment and mood is at present at .94 compared to 1.46 of last week, indicating positive bias.
India Vix a marketplace volatility indicator typically named the “fear gauge“ is at present trading 18.84% compared to 16.60% of last week. Implied Volatility of Nifty ATM selections for the existing series is at 17.44% in contrast to 16.35% of last week, indicating volatile movement on either side in coming session.
Nifty Put selections OI distribution shows that 17,600 has highest OI concentration followed by 17,500 & 17,700 which may well act as help for existing expiry and on the Call front 17,900 followed by 17,800 witnessed important OI concentration and may well act as resistance for existing expiry.
In WEEKLY selections there was Call writing seen at 17,900 strike followed by 17,800 & 17,700 whilst on the Put side noticeable activity of writing was witnessed in 17,600 & 17,650 strike costs. Options information recommend an instant trading variety amongst 17,900 and 17,500 levels.
Banknifty Outlook :
In existing series there has been a Short Covering witnessed in Bank Nifty Fut with a raise in cost of 5.99% and lower in OI by 47% as on today wherein there was unwinding of 6.86Lac shares in OI, decreasing from 14.63Lac to 7.07Lac shares whilst there was addition of 6.71 Lac shares today in next series. Bank Nifty September rollover stands at 66% for today and Bank Nifty Put Call Ratio a sentiment indicator applied by Traders to gauge the marketplace sentiment and mood is at present at .88 compared to 1.09 of last week indicating positive bias. .
Bank Nifty Put selections OI distribution shows that 37,500 has highest OI concentration followed by 37,000 & 36,000 which may well act as help for existing expiry and on the Call front 38,000 followed by 38,200 & 38,300 witnessed important OI concentration and may well act as resistance.
In WEEKLY selections Call writing seen at 37,900,38,000 & 38,one hundred strike whilst on the place side it was seen at 37,000 & 37,500 & 36,000 Options information indicated an instant trading variety amongst 38,500 and 37,000 levels.
Banknifty Open Interest Concentration :
Banknifty Option Open interest transform :
Nifty Strategy :
Traders can initiate a Moderately Bullish method with decreased premium outflow & reduced breakeven point named BULL Contact SPREAD for tomorrow’s Expiry wherein trader will acquire one lot of 17,700 contact strike @ 68 and simultaneously sell one lot of 17,850 contact strike @ 18, so that net outflow or maximum loss will be restricted to upto Rs 2,500 (50 points).Nifty on expiry if closes above 17,750 the method will get started producing profit, nonetheless as the threat is restricted so is the profit also restricted. The maximum gains will be restricted up to Rs 5,000 (one hundred POINTS) only due to the fact the gains of a lengthy 17,700 strike contact will be offset by the sold 17,850 strike contact if Nifty closes above 17,850 on expiry.
And for Traders who want to trade for limitless profit with restricted money outflow can Buy Nifty strike cost of 17,750 @ 45 of 30th September expiry wherein this method will be lucrative if Nifty closes above 17,795 on expiry, whilst the maximum feasible loss will be restricted to Rs 2,250/- (45 points) which is the premium quantity paid by the trader & the gains can be limitless above the bep of 17,795.
(Rajesh Palviya is the Vice President – Research ( Head Technical & Derivatives), Axis Securities. Views expressed are the author’s personal. Please seek the advice of your economic advisor prior to investing.)