Derivative Insights - May 20, 2020 - Geojit

The Nifty May futures closed at 8884.10 with a gain of 0.66% or 58.25 points on Tuesday. Open interest of the current month expiry increased by 37,425 shares indicating addition of long positions in the markets. Nifty future traded at premium of 5 points against a premium of 2.6 points on Monday. Nifty's VIX slumped by 3.57% to close the day at 39.4525 versus 40.9150 on the previous day. FIIs turned to buyers yesterday in the F&O segment after being sellers for five consecutive days; bought derivatives worth Rs 4890.62cr as per provisional figures. On the open interest front, FIIs added long positions in future index by 54.77% while reduced future index shorts by 33.20%. On the options' side, they increased OI in Index call longs by 20.87% and Put shorts were up by 3.98%.

Nifty Outlook

In the last two days, call traders have moved out of both 9500 and 10000 strikes which were hitherto the two most active strikes. The interest has now shifted to 9300,9400, and 9800 where OI is the highest now, suggesting that with just about a week to expiry, and with max pain slipping near 9100, traders inclined to see a narrower range. But, approaching expiry also means higher trading interest, as witnessed yesterday. FIIs added the most to index future longs and call longs. And the bulk of the exits have come from index future shorts. Index option call shorts and put longs have not yet bought into this yet, raising hopes of upside possibilities.

Source : Equity Bulls

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