Buy options to trade, IV's too low - Angel Broking

Nifty spot closed at 6274.25 this week, against a close of 6168.40 last week. The Put-Call Ratio has increased from 0.95 to 1.08 levels and the annualized Cost of Carry is positive 17.55%. The Open Interest of Nifty Futures increased by 2.52%.

PCR-OI has increased from 0.95 to 1.08 levels. This ratio has mainly increased due to significant buildup in the range of 6100 to 6300 put strikes. While in call options we hardly saw any buildup on week on week basis, some unwinding was seen in 6500 & 6600 strikes. Highest buildup is seen in 6300 call & 6200 put options.

Total open interest of market has increased from Rs. 1,48,480/- cr. to Rs. 1,63,333/- cr. Stock futures open interest has increased from Rs. 37,662/- cr. to Rs. 39,076/- cr. Some of the large cap which added open interest are BANKBARODA, DLF, MARUTI, BPCL and AMBUJACEM. Open interest was shed in large cap names like POWERGRID, COALINDIA, ADANIENT, KOTAKBANK and GMRINFRA.

Implied Volatility (IV) for NIFTY has decreased from 15.85%.to 13.13%. Historical volatility (HV) is at 21.51% and that for BANKNIFTY is trading at 37.85%. Liquid counters having very high HV are HDIL, ORIENTBANK, BANKINDIA, AUROPHARMA and IRB. Stocks where HV are on lower side are INFY, COLPAL, DRREDDY, LUPIN and TATACHEM.

Nifty futures closed at a premium of 29.35 points against the premium of 29.35 points to its spot. Next month future is trading with premium of 83.90 points. Liquid counters where CoC is high are UNITECH, INDIACEM, ASHOKLEY, TATACOMM and IFCI. Stocks with negative CoC are BHEL and TECHM.

Source : Equity Bulls

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