The options writers squared their short positions in 3700-4000 puts in the morning session as the Nifty July futures opened weak at 3915. However, there were no sellers in 3700 and 3900 puts when the Nifty slipped below 3900 around noon.
On the other hand, call writers sold 4100-4400 calls at will. Put options traders expect the Nifty to trade below 3700 in the near future. They therefore rushed to unwind the positions created earlier, while the call writers expect a stiff resistance above 4100.
The Nifty July futures closed at a discount of 57 points as against 12 points yesterday. The open interest in July futures rose by 4.95 million shares in intra-day trading at an average price of 3880 as against day's closing rate of 3804. But a mere 1.46 million shares were carried forward after the close-out, which indicates fresh build-up in short positions and unwinding of long positions.
Among the stock futures, Ranbaxy Laboratories witnessed fresh short build-up due to FDA concerns. The July futures of Ranbaxy fell 14.54 per cent and the open interest increased by 2.61 million shares.
Among the banking stocks, short build-up was seen in ICICI Bank, HDFC Bank and State Bank as their stock futures declined by 8-9 per cent each and the open interest increased by around 10 per cent each.
