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

Cues from F&O activity suggests that 18300 will act as a stiff resistance while 18,000 will be a strong support.

The Indian equity market continues to see a volatile session. After gaining on trade on October 26, Nifty 50 closed 0.31 per cent down in yesterday’s trade. Though, it saw a gap up opening. Nevertheless, a huge sell-off after 1:45 PM pulled down the market.   

Today being the last Thursday of the month it is also the monthly option expiry day. Looking at yesterday’s trading action in the F&O market, it seems that the market is likely to close between 18,100 and 18,300 in today’s trade. The highest put writing was seen at strike price of 17950 (11,148 contracts added on October 27), followed by 18,050 (6458 contracts added on October 27), while there was put unwinding at strike price 17,000 (10551 contracts shed), followed by 17,400 (10546 contracts shed). 

Highest total put open interest of 83,880 contracts stood at strike price 18,000, which will act as strong support for the market in today’s trade. This is followed by strike price 18200, which saw a total put option of 79,932 contracts, while strike price 17,800 has 61,339 contracts in open interest. 

In terms of overall open interest on the call option side, maximum open interest stood at a strike price of 18,500, which will act as a strong resistance. Total call open interest of 1,43,705 contracts stood at a strike price of 18,500. Aggressive call writing was seen at strike prices of 18,300 and 18,350, which will act as a first resistance level. Total open interest at the strike price of 18,300 stood at 1,39,864. 

Following table shows the difference between call and put option at strike price near to max pain of 18200. 

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