INSUBCONTINENT EXCLUSIVE:
The heavy put selling at 11,500 on Tuesday indicates that traders expect weekly Nifty options to expire closer to or at11,600on
March20.TheNifty ended up three-fifths of a percent at 11,532.4 Tuesday.
Heavy selling at the 11500 put, which is almost at-the-money,
underscores the bullish sentiment.
The put call ratio open interest of the weekly Nifty options at 1.55 also suggests that bulls hold
sway.
The 11,500 put saw 10.74 lakh shares (75 shares make one lot) being added on Tuesday raising the total open interest to 18.08 lakh
The base has shifted higher from 11400 to 11500 just a day before the options expire.
The 11,600 call has the highest open interest of 14.48
What this set up indicates is that option sellers are unlikely to allow the Nifty to expire below 11,500 or above 11,600 as in either
Ever since weekly Nifty options were introduced from February 11 the base of the index has been shifting higher.
Palviya suggests doing a
bull call spread on April 25 expiry Nifty options
The spread involves buying one Nifty option at 11,600 strike, selling one at 11,900
In addition, one could sell an 11,000 put of same expiry to reduce the debit
Shares like ITC, Reliance and Axis Bank were among the index heavyweights which witnessed a long build up Tuesday
