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

The Nifty 50 put call ratio (PCR) closed at 0.92 better than 0.72 in the previous trading session. A PCR above 1 is considered bullish while a PCR below 1 is considered bearish.

Indian equity market gained by almost 0.85 per cent in yesterday’s trade on the back of a cut in fuel excise duty and positive global cues. There was positive news coming from the world’s two largest economies. In the US investors are upbeat after the passage of the infrastructure bill and China's exports to beats forecast in October, to deliver a record trade surplus. Inflation numbers due this week both in India and US will give some sense of market direction going ahead.   

Activity on the F&O market for the weekly expiry on November 11, 2021, now clearly shows that 18,500 will act as a strong resistance for this week. The highest call option open interest (91,666) for Nifty 50 stood at a strike price of 18,500. In terms of the highest addition of open interest in the call options front was at 18,500 in the last trading session. A total of 44,489 open interest was added at this strike price. The next highest call option open interest stands at 20,000 where total open interest stood at 71,651. 

In terms of put activity, the highest put writing was seen at strike price of 17000 (36,664 open interest added on November 03), followed by 17,900 (74,231 open interest added on November 08), while there was put unwinding at strike price 17,000, followed by 16,700. 

Highest total put open interest (104,498) stood at a strike price of 17,900. This is followed by a strike price of 17,800, which saw a total put option open interest of 71,606 contracts. 

Following table shows the difference between call and put option at strike price near to max pain of 18000. Max pain has moved up from 17,900 to 18,000 mark in yesterday’s trade. 

The Nifty 50 put call ratio (PCR) closed at 0.92 better than 0.72 in the previous trading session. A PCR above 1 is considered bullish while a PCR below 1 is considered bearish. 

 The following table shows the participant-wise action of key players on the index options front.