BankNifty open interest is lowest since February: Angel Broking
Author(s): City Air NewsMs.Sneha Seth (Derivative Analyst, Angel Broking): "The benchmark index extended Monday’s gain in the early trade today; however these gains were short lived as profit booking emerged thereafter. Eventually, Nifty...
cityairnews
Jul 4, 2017 12:30
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Ms.Sneha Seth (Derivative Analyst, Angel Broking): "The benchmark index extended Monday’s gain in the early trade today; however these gains were short lived as profit booking emerged thereafter. Eventually, Nifty traded in range to conclude the session on a flat note.
On derivatives front, Nifty and BankNifty open interest increased 2.22% and 3.52% respectively. In Nifty options, 9700 call option added some positions, followed by unwinding in deep out the money strikes 8300-8500. While, in put options, good amount of open interest addition was seen in
9300-9600 strikes. Meanwhile, maximum concentration of open interest remains intact in 9700 call and 9400 put options.
One of the important observations for BankNifty is that, the total open interest in this rate sensitive index plunged around 28%last series. At present, BankNifty open interest is lowest since February, suggesting majority of the longs formed since the beginning of calendar year 2017 have been wiped off. Thus, traders are suggested to exit from their longs if any and wait for fresh build-up before initiating any directional positions.
As far as FIIs activity is concerned, they formed decent short positions (on net basis) in index futures since the start of July. They added nearly 17912 contracts of short positions, resulting FIIs Index Futures ‘Long Short Ratio’ declining to 77% from 82%. However, we haven’t seen any relevant profit booking of long formed in last couple of series. At present, the overall data is not giving any clear direction. Hence, traders are advised to remain light in index and prefer stock specific approach to fetch higher returns."
