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Equity Futures:Traders buy 18300-18500 call options; Nifty 50 seen up

Informist, Monday, May 8, 2023


By Ananya Grover


MUMBAI – Traders bought call options of 18300-18500 strike prices as the Nifty 50 index saw a strong pullback from Friday’s losses and rose over 1% today. Analysts said the index is out of the woods now that it has crossed the crucial hurdle of 18200 points.


The Nifty 50 ended 1.1% higher at 18264.40 points, after hitting an over four-month high of 18286.95 points, today. 


However, volatility index India VIX rose nearly 3% today. Viraj Vyas, an analyst at Ashika Stock Broking, said that the index is recovering from its 52-week low and this indicates the spot market might witness bigger up and down moves.


In today’s session, maximum long additions was at call strike of 18500, whose open interest was at 8.61 mln, up by 2.88 mln from Friday. Premium on this level rose 44.6% to 7.30 rupees. Analysts said massive call unwinding happened today and the market has now shifted to 18300 strike. Open interest at this level was at 8.5 mln, with marginal new additions.


Vyas also said that the current rally in the Nifty 50 is of scepticism. Hence, some traders wrote off their call positions at 18500 levels in anticipation of a downward move, he said.


On the put side, selling was seen in options of 18000-18300 strikes, with open interest at these levels rising by more than 2 mln, indicating a positive momentum in the market.


“For the week, we expect the market to continue with its positive structure dictated by corporate earnings and consistent buying by foreign institutional investors,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services in a post market note.


Among sectors, automobile, banking, and metal stocks are likely to contribute to the gains in the index going forward, said Brijesh Ail, analyst at IDBI Capital. “Nifty Bank index has already recovered 600 points out of the 1000 points it lost on Friday, fresh long positions can be added if the index crosses 43500 points,” Ail added.


Today the Nifty Bank index ended 1.5% higher at 43284 points.


The May futures contract of the Nifty 50 closed at a premium of 53.10 points to the spot index today. Open interest in the contract was 10.7% higher at 11.22 mln, as per provisional data.


–Nifty 50 May closed at 18317.50, up 187.80 points; 53.10-point premium to spot index

–Nifty 50 Jun closed at 18383.00, up 182.15 points; 118.6-point premium to spot index

–Nifty 50 Jul closed at 18445.00, up 175.65 points; 180.6-point premium to spot index


HDFC Bank, ICICI Bank, Canara Bank, Tata Motors, and State Bank of India were among the most-actively traded underlying today. End


Edited by Aditya Sakorkar


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Source: Cogencis

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