Traders in such situations like to stick to neutral trades that involve buying or selling puts and call simultaneously. Several traders told Moneycontrol that it was difficult to find suitable trading opportunities.
Weakness in the market continued on February 9 as the Nifty traded flat. As of 10.20 am, the index was down 0.04 percent or 7 points to 17,864. Directionless trade is making it difficult for traders to make money.
Coming to options, on the next week’s expiry, call writing was seen at 18,000 as that level is emerging as the next big hurdle for the index. Call writers were also present at 17,900 while put writers consolidated their position at 17,800. This narrow range of activity indicated traders don’t see any sharp movement on either side.
Bars reflect changes in OI during the day. Red bars show call option OI and green put option OI.
Traders in such situations like to stick to neutral trades that involve buying or selling puts and calls simultaneously. Several traders told Moneycontrol that it was difficult to find suitable trading opportunities. They remarked that since India VIX has also softened, the premium is also lower on option contracts.
Meanwhile, volatility in Adani Group stocks continued as MSCI said it will be reviewing the free float of Adani Group companies in its indices. Adani Enterprises and Adani Ports saw massive short buildup, which is a bearish sign that occurs when prices go down but open interest rise. ACC, another group company, was also on this list.
On the other hand, Trent, Cummins India and Oberoi Realty were those that saw long buildup, which happens when price and open interest rise in tandem.
Research analyst and trader, Manish Shah, said that there are a couple of intraday opportunities. He recommended Amara Raja Batteries which he believes can go to Rs 610. Besides, he is also bullish on L&T which he believes can hit Rs 2180 today.