ange Bound View: Nifty trading at premium, strong put writing with call shedding across the strike prices indicates upside momentum to continue. However, we expect no major upside n account of low put writing above 5,200 and volatility approaching to its support level. So, the strategy for the traders could be to sell 5,300 CE and 5,100 for the June series.
Option Analysis
· Call Writing: In today’s trading session, shedding of open interest was witnessed across the strike prices. Major shedding was observed at 5,100 and 5,000 of 9 lakh shares and 8.5 lakh shares respectively whereas writing was witnessed at 5,500 level of 8.33 lakh shares. Concentration of call still observed at 5,200 strike price of 72.4 lakh shares.
· Put Writing: On the other hand, major writing was witnessed at 5,200 and 5,100 strikes of 17.5 lakh shares and 18.5 lakh shares. Concentration of put still observed at 5,000 of 82.62 lakh shares.
Implications: Strong shedding of call with writing of put across strike prices indicates upside momentum to continue. However, we still maintain our view for June series to settle below 5,200 on account of call concentration and weak put writing above 5,200.
FIIs and DIIs activity in capital market segment
· FIIs were net buyers of Rs 347 crore with Gross buyers of Rs 1,956 crore and Gross Sellers of Rs 1,608 crore.
· DIIs were net sellers of Rs 41 crore with Gross buyers of Rs 951 crore and Gross sellers of Rs 992 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 14th June, 2010 close at 22.95 which is 8.57% lower as compared to previous close, after touching an intraday high of 24.93 and low of 22.89.
Implications: Volatility plunged further to 23 levels in today’s trading session. We maintain our bearish view on volatility implies going “Short on Volatility and Long on Nifty”
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