The Nifty November futures today closed at a discount of 12 points to the spot index, while the open interest (OI) increased by 2.86 million shares intraday, indicating that F&O players have built up fresh short positions during the trading session today. However, the OI in November futures declined by 1.25 million shares, indicating that some short positions got covered today.
Call options buyers were unwinding their positions at 3,100-3,400 strike call options, which points to a likely pullback in the Nifty up to 3,400. Put writers were covering their positions at 2,900 and 3,000 strike puts as they expect the index to trade below the 2,900 level in the near future.
The unwinding was also seen in out-of-the-money puts at the 2,800, 2,600 and 2,400 strikes, indicating that bulls expect support for the index moving down below the 2,800 and 2,700 levels in the near term. Besides, fresh call writing was seen at 2,900 and 2,800 strike call options, suggesting that the index may face stiff resistance above 2,800 if the index falls below the 2,800 level.
Key benchmark indices slumped in volatile trade today, extending Tuesday’s losses on distress selling. The 30-share BSE Sensex was down 1,000 points or 9.5 per cent, while the 50-share S&P Nifty of NSE fell 300 points or 9.5 per cent in the last two days on account of the bear onslaught.
Trading volumes in the F&O segment of NSE have increase by over 50 per cent in the last two trading sessions, indicating that bears have come out in the open.