Higher call writing and concentration witnessed at 5,100 and 5,000 indicates weakness at current levels and these levels to act as a major resistance. We believe markets to trade in the narrow range of 5,100 and 4,900 for near term and 4,800 as a worst case scenario for June series.
Option Analysis
· Call Writing: Fresh addition of open interest was observed at 5,100 and 5,000 strike prices of 8.86 lakh and 6.14 lakh contracts respectively. In today’s trading session, we have observed shift in concentration from 5,300 to 5,100 strike price where the total open interest build up is 64.54 lakh contracts.
· Put Writing: In today’s trading session, major shedding in open interest was observed at 5,000 strike price of 6.14 lakh contracts with fresh writing at 4,500 strike of 4.81 lakh contracts. Major concentration of open interest is observed at 4,800 strike price of 76.41 lakh contracts.
Implications: Consecutive second trading session of higher activity witnessed in call than put and shedding in put options at at-the-money and in-the-money strike prices would invite further selling pressure at current levels. We expect the markets to trade in the range of 5,100 and 4,800 for June series on account of concentration.
FIIs and DIIs activity in capital market segment
· FIIs were net sellers of Rs 242 crore with Gross buyers of Rs 1,730 crore and Gross Sellers of Rs 1,973 crore.
· DIIs were net buyers of Rs 41 crore with Gross buyers of Rs 1,074 crore and Gross sellers of Rs 1,033 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 8th June, 2010 close at 28.77 which is 2.79% higher as compared to previous close, after touching an intraday high of 29.38 and low of 27.21.
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