Put writers losing confidence: Angel Broking

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

"It was indeed a volatile day for our market as the index climbed towards 10300 mark in the early morning trade; however, bear took control near the resistance zone (10300-10350) and pushed the index below 10200 mark.

In Nifty options front, we saw some open interest addition in 10400-10500 call options. On the flip side, 10200 and 9900 put options added good amount of fresh positions; looking at the puts implied volatility we believe these are long positions. In addition, we also witnessed huge unwinding in 10000 put; indicating put writers losing confidence on index sustaining above 10000 mark bearing in mind today's massive selling pressure.

As mentioned in the yesterday's article, the volatility index surged above the resistance zone (15.50) and we experienced decent volatility too. At present, majority of the positions formed in index futures segment are on short side and are still in system. In addition, looking at the unwinding that took place in 10000 put option today, we can sense that further selling pressure may push index below the psychological support of 10000-10050 levels."

Source : Equity Bulls

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