: In today trading session, we have witnessed increased in open interest with premium declining by ~20 points implies Short Built-up at higher levels. On options side, more activity was seen at call options rather than put options. Higher call activity was seen at strike price above 6,100 and put shedding at lower strike price. According to options and futures activity, its seems market will continue its negative trend will take intermediate support at 6,100. Nifty future premium narrowed with decline in open interest by 4.7%. To confirm the negative trend, put call ratio had also declined from 1.60 to 1.52.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 4th January, 2011 close at 17 which is 0.3% higher as compared to previous close, after touching an intraday high of 17.5 and low of 15.7
Implications: For last 3-4 months, Indian VIX is trading near to its support. So, We expect volatility to increase going forward which will lead some correction in market because it has inverse correlations.
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