Market watch: What does the Futures and Options market suggest about trade on May 4?

The Nifty 50 put call ratio (PCR) closed at 0.77 for the day.

Indian equity market opened in red due to negative global cues. Investors seem to be nervous ahead of the rate hike by central banks globally and especially US Fed, which is expected to aggressively hike rates in its upcoming meeting. Data from the world’s second-largest economy also shows that a steeper contraction in the activity due to widespread COVID-19 lockdowns. 

Nifty 50 opened at 16924.45 against the previous close of 17102.55. Nonetheless, during the trading hours, it recovered and closed with a loss of 33.45 points or 0.2 per cent at 17069.1. The recovery in the market was led by Banking, FMCG and Metal stocks, while the Consumer Durables, Auto and IT sector ended in the red. What also helped the market was US key equity indices futures turned into the green. 

Activity on the F&O front for weekly expiry on May 5 shows 17500 to act as a strong resistance now. Highest call open interest contract of 133641 stood at this strike price. The second-highest call option open interest 109409 for Nifty 50 stood at a strike price of 17600. In terms of the highest addition of open interest in the call options front, it was at 17600 in the last trading session. A total of 54171 open interest was added at this strike price. 

In terms of put activity, the highest put writing was seen at a strike price of 17000, where 39498 open interest was added today, followed by 16900 strike price where (27294) open interest was added. Highest total put open interest (122306) stood at a strike price of 17000. This is followed by a strike price of 16000, which saw a total put option open interest of 90561 contracts. 

The Nifty 50 put call ratio (PCR) closed at 0.77 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 for weekly expiry on May 5 stands at 17100.

Top five call and put open interest with their strike price