Market watch: What does the F&O market suggest about trade on budget day?

Max pain at the end of today's trade stands at 17300.

Nifty rose smartly in today’s trade, however, a higher Nifty VIX suggests investors are cautious. In today’s trade, Nifty was up 1.39 per cent or 237.9 points and closed at 17339.9. Indian equity remains one of the best performing indices globally. Meanwhile, Nifty VIX also surged by 6.08 per cent and closed at 21.95. Nifty IT was the best performing sector and in Sensex out of the top five, three were from the IT sector.  

Activity on the F&O front for weekly expiry on February 3 shows 18500 to act as a strong resistance now. Highest open interest contract of 100893 stood at this strike price. The second-highest call option open interest 98279 for Nifty 50 stood at a strike price of 18000. In terms of the highest addition of open interest in the call options front, it was at 18500 in the last trading session. A total of 39674 open interest was added at this strike price.

In terms of put activity, the highest put writing was seen at a strike price of 17300, where 26630 open interest was added on January 31, followed by 16000 where (20187) open interest was added. Highest total put open interest (73206) stood at a strike price of 15100. This is followed by a strike price of 16000, which saw a total put option open interest of 60029 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 17300.