Market watch: What does the F&O market suggest about todays trade?

Cues from F&O activity suggests that 18500 will act as a stiff resistance.

The Indian equity market finally gained ground in yesterday’s trade and Nifty 50 closed 0.8 per cent higher. Although, at one point in time, Nifty 50 traded in red, nevertheless, it finally closed 143 points higher. Such optimism was also visible in the F&O market. 

 Heavy call unwinding took place at 18,200 strike price and 42793 contracts were shed at that strike price. In terms of overall open interest, maximum open interest stood at a strike price of 18,500, which will act as a strong resistance. Total call open interest of 1,25,093 contracts stood at a strike price of 18,500. Call writing was seen at strike prices of 18,600 and 18,650. Total open interest at the strike price of 18,600 stood at 86,397. 

Highest put writing was seen at strike price 18200 (25,872 contracts added on October 26), followed by 18,300 (19,750 contracts added on October 26), while there was put unwinding at strike price 17,000 (12476 contracts shed), followed by 17,500 (8541 contracts shed). 

The highest total put open interest of 86,972 contracts stood at strike price 18,000, which will act as strong support for the market in near future. This is followed by strike price 18200, which saw a total put option of 81,571 contracts, while a strike price of 17,500 has 70,263 contracts in open interest. 

The Nifty 50 put call ratio (PCR) closed at 0.81, higher than 0.64 seen at the start of the week. A PCR above 1 is considered bullish while a PCR below 1 is considered bearish. 

Following table shows the participant wise action of key players on the index options front.