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Nifty index futures closed 0.28% higher at 11933.8 on Monday. Open interest declined marginally by 70 thousand contracts and closed at 1.85 crore contracts. Cost of carry slumped to a premium of 11.1 which was at 30.1 on Friday. Resurgence of Put writing in Nifty options induced a surge in PCR OI from 1.32 to 1.36. India VIX closed flat at 14.86.
FIIs' cautious trade continues
FII activity remained cautious in the derivative segment on Monday. In index futures they reduced positions from both longs and shorts where the open interest declined by 5308 contracts and 2873 contracts respectively. In index options activity was almost equally distributed among all the sub-segments. However, there was a slightly higher bias towards Put longs, which induced a marginally higher addition in synthetic shorts. Evidently, the exposure in synthetic shorts continued to reel higher at 54% of the total exposure in index options. Ironically, the stock future segment witnessed addition of long positions where the net open interest rose by 2988 contracts.
NIFTY OUTLOOK: Trade may be range bound Put
writing seen at 11500 has ensured that the maximum Put open interest remains at that strike. Put writing was also seen at 11800/11900 strikes which hints at the immediate support region. Anyhow hesitancy to add Call longs beyond the 12000 strike may be an indication of the potential consolidation in the market.
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