Market watch: What does the F&O market suggest about trade on February 7?

Max pain at the end of today's trade stands at 17550.

Following global weak cues, the Indian market too closed in red in today’s trade. Yesterday, BoE hiked interest rate by 25 bps and even ECB’s was hawkish in its stance. The broader market too underperformed the frontline market in today’s trade. Majority of the sectors ended in red with Nifty Realty being the biggest loser following Godrej Properties’ poor results and deal announcement with DB Realty which was viewed negatively by the market. PSU Banks, Media, and Auto were other losers in today’s trade. Nonetheless, the market is not likely to see any major correction as Nifty VIX saw a fall of 1.37 per cent in today’s trade, which means options writers are not worried much.   

Activity on the F&O front for weekly expiry on February 10 shows 17800 to act as a strong resistance now. Highest open interest contract of 118038 stood at this strike price. The second-highest call option open interest 111895 for Nifty 50 stood at a strike price of 18500. In terms of the highest addition of open interest in the call options front, it was at 17800 in the last trading session. A total of 59331 open interest was added at this strike price.  

In terms of put activity, the highest put writing was seen at a strike price of 17500, where 26174 open interest was added today, followed by 17400 where (24896) open interest was added. Highest total put open interest (63864) stood at a strike price of 17500. This is followed by a strike price of 17000, which saw a total put option open interest of 52793 contracts.

The Nifty 50 put call ratio (PCR) closed at 0.57 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 17550.