Market watch: What does the F&O market suggest about trade on February 14?

The Nifty 50 put call ratio (PCR) closed at 0.81 for the day.

Higher than expected inflation numbers in the USA spooked the equity market globally. US inflation number came in at 7.5 per cent, highest in last 40 years. This has sparked a fear that the rate hike will come sooner than later and even the magnitude may also be high. This will be the beginning of the end of easy money, which has not gone well with the equity market. With today’s fall in the equity market, Nifty 50 has erased all the gains made in the week. Nifty VIX also jumped by 5.48 per cent today and closed at 18.68.

Activity on the F&O front for weekly expiry on February 17 shows the highest open interest contract of 91016 stood at 18,000 strike price. The second-highest call option open interest 78180 for Nifty 50 stood at a strike price of 17500, which will act as resistance now. In terms of the highest addition of open interest in the call options front, it was at 17400 in the last trading session. A total of 60066 open interest was added at this strike price.  

In terms of put activity, the highest put writing was seen at a strike price of 16300, where 48960 open interest was added today, followed by 17100 where (42132) open interest was added. Highest total put open interest (63782) stood at a strike price of 17000. This is followed by a strike price of 16500, which saw a total put option open interest of 63154 contracts.

The Nifty 50 put call ratio (PCR) closed at 0.81 for the day. A PCR above 1 is considered bullish while a PCR below 1 is considered bearish.

Max pain at the end of today's trade stands at 17400.

Top five call and put open interest with their strike price