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Nifty has steam for further upside, reveal options data

At the beginning of the July expiry, maximum open interest for call was at 11,000.

, ET Bureau|
Updated: Jul 27, 2018, 08.45 AM IST
MUMBAI: Options data built up for the August expiry is giving early signs that Nifty, which hit a record high on Thursday, could rally further in the coming days. Maximum open interest of calls for the August expiry is at 11,500 and that for puts is at 11,000 levels. This means traders feel that on the higher side, Nifty could touch 11,500 plus the call premium for that level and the downside should be limited at 11,000 less the put premium.

The range for the market as of now, could be extrapolated to 10,882-11,618 based on the sale price of the 11,000 put and 11,500 call of a combined Rs 118, said Hemant Nahata, AVP, IIFL Wealth. Traders who have sold both 11,000 put and 11,500 call will begin losing money only if the index falls below 10,882 or rises above 11,618.


Nahata estimates that odds of markets testing the upper level are higher, implying 4 per cent upside against 2.5 per cent downside from current levels.

At the beginning of the July expiry, maximum open interest for call and put was at 11,000 and 10,500 which moved higher levels at the month progressed, thanks to strong results season. Nifty closed at 11,167 at the end of July expiry.

“One thing is very clear that result season has been very good and traders are not afraid to go long. The trend is expected to continue, and Nifty could inch closer to 11,500 levels in the coming days. 11,000 is a good support for the index,”, said Rahul Mishra, AVP, Decrivatives, Emkay Global Financial Services Traders should note that August expiry is very long – 35 days – and there could be shifts in the positions during the series.

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