Nifty99000 100%

Sensex99000 100%


Call Writers Turn More Aggressive

Author: Dhirender Singh Bisht/Wednesday, January 27, 2021/Categories: Exclusive

Rate this article:
Call Writers Turn More Aggressive

As the market bellwether BSE Sensex kisses the 50K mark, the market witnessed a sharp selloff. Profit booking was seen across the board and FIIs are not comfortable to hold their position at this level. Ahead of Union Budget of India, some uncertainty also plays a trigger for profit booking. Banking and energy sectors were weak against the market whereas IT and pharma show some strength. In monthly contract, Call writers are active above 14,400 strike and adding Open Interest (OI) aggressively whereas on other hand, Put writers are not active due to current selloff in the market. Even in weekly expiry, the Call writers are more aggressive than Put writers and it indicates that the market is in grip of bears. The highest Call concentration is at 14,500 strike whereas in Put side is at 14,000 strike. The India VIX bounces back and was trading around 23-25 level due to the selloff in the market. The VIX is trading in a range for long time and 26 is a crucial level as it acts as resistance for long time. The traders should keep a check on this level as once it breaches then we can expect a good selloff in the market. The Implied Volatility (IV) gap between Calls and Puts in weekly contract is wide. The Call sellers are asking a very high Implied Volatility due to upcoming event as compared to the Puts, which will attract the Call sellers to write more calls in this expiry. The Nifty straddle for monthly expiry on Tuesday closed at 187 higher as compare to last week. The option max pain for Nifty monthly contract is at 14,300 and Nifty already trading below this level. The option max pain for Bank Nifty monthly contract is at 31,400 points. In coming sessions, the index is likely to trade in the range of 14,000 to 14,400. A sharp selloff can be expected if Nifty fails to hold 14,000 level in the market.

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


Number of views (172)/Comments (0)

Leave a comment

Add comment



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



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