The Nifty continued its corrective phase and fell below 4200 to close at 4189. The benchmark has therefore completed a 50 per cent correction of its recent rise of 750 points from 3790 to 4540.
There was major call writing in July Nifty 4100, 4200 and 4300 call options and the open interest was considerably up at 1.17 million shares. Call writers see the Nifty trading below 4100 if it breaches the 20-days moving average level of 4115. Profit booking took place across all put options, except for the 4200 puts.
Options traders expect the Nifty to trade between 4200 and 4300 levels in the last two trading sessions of the current contract. The Nifty 4200 put-call ratio (PCR) is 1.42 as the options sellers expect the index to settle above 4200.
The Nifty rollovers stood at 47.6 per cent two days before expiry, up from 44.7 per cent in the corresponding period last month. In absolute terms, though, the rollovers in the previous contract were higher at 20.1 million shares compared to the current 19.5 million shares.
Interestingly, the rollovers in August futures contracts are taking place at a discount, while the previous month’s contracts were rolled over at a premium. This points to a rollover of short positions.
Among the major Nifty losers, ICICI Bank witnessed a rollover of 64.4 per cent, State Bank 50 per cent and L&T 45 per cent. The rollovers took place at a discount, which indicates a rollover of short positions. Tata Steel, however, witnessed a rollover of long positions, amounting to 1.75 million shares, as the August futures closed at a premium over the July futures.
