PCR-OI surged to 1.34 as traders prefer buying puts: Angel Broking

Views of Ms. Sneha Seth (Derivative Analyst, Angel Broking):

"Trading for the week begun on a strong note, as the benchmark index opened with an upside gap which guided Nifty hitting fresh record highs in the early trade. In the first half of the day, due to some technical fault National stock exchange (NSE) halted trading activity in cash as well as F&O segment. Soon trading resumed and Nifty extended its gains to conclude to session above 9750 mark.

On options front, 9900 call option added some fresh positions followed by decent unwinding in 9500-9700 strikes. On the flip side, we witnessed significant open interest addition in 9600 and 9700 put options, followed by some build-up in 9750, 9800 and 9900 put options. Looking at participate-wise activity, it seems retail participants have bought put options as they are not expecting further rally going ahead. As a result, maximum open interest of Nifty options has shifted higher to 9800 call and 9600 put options.

As far as today's FIIs activity is concerned, they continue unwinding their long positions in index futures along with some fresh shorts. In Index options, long formation was seen in call options. While, good amount of short covering was witnessed in stock futures. Hence, the overall data of stronger hands (FIIs) is not giving any clear indication; however, the overall options data hints that the trading range has now shifted higher to 9600-9800."

Source : Equity Bulls

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