Nifty99000 100%

Sensex99000 100%

Exclusive

Call Writers Turn More Aggressive

Author: Dhirender Singh Bisht/Wednesday, September 23, 2020/Categories: Exclusive

Rate this article:
5.0
Call Writers Turn More Aggressive

Finally in monthly expiry week of September, bears take a grip on the market. NSE Nifty could not sustain above 11,500 level this time also. Selling in banking, metal and auto continued and finally led the market towards 11,200 level. Some buying interest was seen in IT and pharma in Tuesday session. At 11,300 and above, Call strikes seen aggressive Call writing. Whereas on Put side, some Open Interest (OI) addition seen at 11,000PE, which holds the maximum OI for this expiry on September 24. The Option Pain on Tuesday session shifted from 11,400 to 11,250, which indicates shift of range to lower side in Nifty index. In next weekly expiry (October 1), Call writers are more active as compare to Put writers, which indicates the limited upsides or sell on rise. The India VIX closed at 21.01 touching the intraday high of 23.27 in Tuesday session.

As indicated earlier, the volatility is trading near to its upside breakout level, which indicates fear in the market. There is a highly inverse correlation between volatility and market so rising volatility suggests fall in the market in coming session. The current week straddle closed on Tuesday at 133 higher than previous week indicates +/- 133 point movement in the market. These are the levels, where the option sellers are comfortable on their sold position in straddle. On contrary to this in current week, Call writer are more aggressive than Put, which means that there is less chances that this level to be sustain.

Earlier this week, there is a high volatility in Calls and low volatility in Puts, which attract the Call sellers and Put buyers in the market. Now, the volatility on both sides is at par which somehow implies that the Call sellers and Put sellers now will be active in upcoming session. The Nifty is likely to trade in the range of 11,300 on upside and 11,000 on downside as it is also a psychological level in upcoming expiry. The global cues are also volatile so trades should keep a track of global cues, which will lead the movement in the market.

The writer is a senior research analyst (derivatives) at SMC Global Securities Ltd

Print

Number of views (171)/Comments (0)

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free