Derivative Insights - June 4, 2020 - Geojit

Nifty gained for the sixth session, reclaiming 10,000 mark for the first time since 13th March. Nifty closed 1.32% higher at 10110.55 after a late profit booking spree toppled it from the intraday high of 10175.7. Bajaj Finance was the top gainer in Nifty 50 rising 5.5%. FIis added 8.3% to their index future long position, while cutting 3.1% of their index future shorts.

Nifty Outlook

The rise in index future longs points to FIIs continuing with their accumulation spree. The simultaneous reduction in index future shorts pushes the proportion of index future longs of FIIs to 62%, an unusually skewed position. Along index options, the largest build came along put shorts, which rose by over 20%. Option spectrum of Nifty shows that such shorts were largely along 10000 strike, which saw an OI build of 6307 contracts, with 9600 and 9000 or showing brisk activity along the same line. Along calls, fresh positions are going further and further OTM, especially on to 11000, 10800 and 10300, which saw the highest long addition. This suggests that there is an abundance of positive expectations, along index futures, calls and puts. It may not be time to short yet, but certainly rings caution.

Source : Equity Bulls

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