Banks such as Union Bank, Andhra Bank, Bank of Baroda and Bank of India all seem to have overbought put-call ratios as a result of this sharp fall in OI. It may thus be worth selling the April futures of these PSU banks. A technical correction looks about due if the low OI and low PCRs are to be trusted.
| Stocks with highest change in options OI | ||
| Stocks | % Change | PCR* |
| Union Bank | -64.95 | 0.23 |
| Satyam | -66.05 | 0.50 |
| Andhra Bank | -66.44 | 0.43 |
| Bank of India | -74.76 | 0.39 |
| HCL Tech | -75.19 | 0.20 |
| ONGC | -75.19 | 0.14 |
| ACC | -81.16 | 0.48 |
| Jet Airways | -85.13 | 0.38 |
| Hero Honda | -86.49 | 0.11 |
| i-flex | -97.66 | 0.08 |
| * Put-call ratio | ||
Hero Honda, HCL Tech and ONGC also have low PCRs and dipping OI. Perhaps it is worth shorting this trio as well. However, if you do decide to short by selling April futures, consider also buying a long call with a strike price set just above the respective spot levels. This would hedge the short futures position.
In the stock futures segment, ITC and Polaris Software may both be worth long April futures positions. Shipping Corporation is perhaps the most comfortably bullish in terms of both technical chart positions as well as return ratios in the options segment.
| Stocks with highest change in futures OI | ||
| Stocks | % Change | 1-month future price |
| Andhra Bank | -22.65 | 107.90 |
| HPCL | -22.86 | 321.60 |
| Tata Motors | -22.93 | 420.15 |
| Jet Airways | -23.04 | 1246.95 |
| Satyam | -24.06 | 412.90 |
| Hindalco | -24.11 | 1346.85 |
| BPCL | -26.24 | 364.70 |
| ACC | -30.90 | 356.10 |
| Bajaj Auto | -33.38 | 1052.10 |
| ICICI Bank | -40.59 | 399.65 |
In SCI, a long 160c (3.9) versus 170c (1.5) cost 2.4 and it could provide a return of 7.6. Of course, SCI also seems a fairly decent shot in terms of a long April future.
While there are many other stocks that offer good return-risk ratios in the options segment, there is little else that seems technically worth a bull-spread in terms of the movements alone.