Market watch: What does the F&O market suggest about trade on January 28?

Max pain at the end of today's trade stands at 17100.

After showing a positive closing on January 25, the Indian equity market once again plunged into red in today’s trade. Thanks to the negative cues coming out of the US Fed Reserve, which was more hawkish than the street expectation. Nonetheless, the good part of today’s trade was that it recovered almost 240 points in Nifty 50 from intra-day lows. It was largely helped by the good show of banking and auto names. Nifty VIX too slipped by 2.81 points from its intra-day high to close at 21.06, down by 1.37 per cent from its previous close.     

Activity on the F&O front for weekly expiry on February 3 does not give a clear picture as we have Union Budget on February 1. Currently, the highest open interest contract of 66693 stood at a strike price of 19800. The second-highest call option open interest of 50055 for Nifty 50 stood at a strike price of 19000. In terms of the highest addition of open interest in the call options front, it was at 19800 in today’s trading session. A total of 61382 open interest was added at this strike price.

In terms of put activity, the highest put writing was seen at a strike price of 15100, where 43881 open interest was added on January 27 followed by 15500 where (21751) open interest was added. Highest total put open interest (45674) stood at a strike price of 15100. This is followed by a strike price of 17000, which saw a total put option open interest of 33369 contracts. 

The Nifty 50 put call ratio (PCR) closed at 0.65 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 17100.