Nifty99000 100%

Sensex99000 100%


Options Data Points To Stock-Specific Movement

Author: Dhirender Singh Bisht/Wednesday, January 6, 2021/Categories: Exclusive

Rate this article:
Options Data Points To Stock-Specific Movement

As the domestic stock markets are steadily taking upside movement, the NSE Nifty is trading above its rollover over level. The NSE benchmark index is currently trading above its psychological level of 14,000 points. The IT and mid-cap stocks showed strength against the market. In weekly contract, the Call option sellers are active at and above 14,300, whereas Put option writers are active at and below 14,100 level, which stiff the range of the market to 14,300 to 14,100 points. In monthly contract, some liquidation in ATM (At The Money) Call strike seen whereas Put writers are still active at 14,000 level. The highest concentration of Calls in weekly contract is at 14,500 points, whereas the Put highest concentration is at 14,000 strike. The Implied Volatility (IV) gap between At The Money (ATM) Call and At The Money (ATM) Put is around 4-5 per cent, which is a slightly higher than the normal scenario for the derivatives market. The gap between the Call Implied Volatility and Put Implied Volatility expand as compared to the last week. The Put is little expensive compared to Calls, which will attract the option writer to write Put options. From more than five months, India VIX is majorly trading in range of 24 to 18, whenever there is a spike in volatility its settle down later on. The India VIX is trading around 20 and expected to trade in a range for upcoming sessions. The Nifty option max pain is at 14,200, whereas the Bank Nifty option max pain is at 31,500 strike. The continuous upward shifting on option max pain level indicated that bulls are having a grip over bears. Weekly straddle is trading around 146, which is somehow around equal to the previous week indicates that the option writers are comfortable at +/-146 points movement in coming sessions. The Index is likely to trade in the range of 14,500 on upside and 14,000 on downside in upcoming sessions as it is also a psychological level. Every dip in market can be considered as a buying opportunity and stock-specific movement can be expected.

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


Number of views (171)/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