Derivative Insights - May 15, 2020 - Geojit

The Nifty May futures closed at 9143.9 with a loss of 2.66% or 249.65 points on Thursday. Open interest of the current month expiry increased by 55,425 shares indicating addition of short positions in the markets. Nifty future traded at premium; stood at 1.15 points against a premium of 10 points on Wednesday. Nifty's VIX fell by nearly 2% to close the day at 38.1825 versus 38.8350 on the previous day. FIIs were sellers for third straight day in the F&O segment; sold derivatives worth Rs 616.63cr on 14 May as per provisional figures. On the open interest front, in the future index long, FIIs unwound positions by 17.97% while adding exposure in future index short by 32.33% on the day of weekly expiry.

Nifty Outlook

FIIs are seeing raising their index future short positions and thus raising overall OI in the index futures, both of which were at critically low levels. Rise in participation augurs well for the market. Meanwhile, despite the distribution seen throughout the week on every attempts to rise, the put long additions have not increased much into the far OTMS, and the bulk of such interest have been limited to 8500, which is where the highest OI jump was yesterday. Meanwhile the jump in put longs at 8000 is not yet sizeable to be considered as a downside objective, but its evolution as strike of interest will be closely followed next week. Volume along puts is the highest between 9000 and 8500. Therefore, for now the possibilities for a directional downside look low as neither is the negative build up forceful enough nor is the positive build up too heavy for a collapse.

Source : Equity Bulls

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