ATM puts attracting decent shorts: Angel Broking

Derivatives Desk by Ms. Sneha Seth (Derivatives Analyst, Angel Broking):

"Post Tuesday's strong up move, it was the second consecutive session wherein our market closed almost on a flat note. If we talk about the intraday activity, we had a positive start but due to lack of buying interest index corrected below 10850 in the midst. This was again bought into to hit fresh intraday highs and then Nifty consolidate to end the session tad above 10900.

In F&O space, we witnessed decent open interest addition in Nifty as well as BankNifty. But, looking at the price action we would say it's a formation of both long and short. In line to the previous two session, put writers continued adding positions in 10900 strike. On the other side, open interest addition was seen 10900-11100 call options. Maximum open interest concentration for January series remains intact in 11000 call and 10500 put option.

If we glance at the overall OI activity in index futures for current series, we believe majority of the positions formed are on the long side. In fact, decent amount of longs that has been rolled from December series are also intact in the system. In addition, consistent witting in ATM puts is also a good indication for bulls. Hence, we would maintain our positive stance on the market and would advise traders to buy 11000 call option for this expiry."

Source : Equity Bulls

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