Traders Pile On Short Positions As Nifty Tests 8,100
FIIs unwound 13,398 index puts and added 7,939 index calls on net basis.
Indian shares dropped to a near five-month low as automakers and consumer companies led losses as investors continued to grapple with the fallout of the government’s recall of high-value currency notes.
The NSE Nifty 50 index, which closed just above 8,100, declined by another 2.3 percent on Tuesday. Its November futures added 11 percent in open interest indicating fresh short positions. The Nifty Bank Index also corrected by 2.3 percent buts its futures added 14.7 percent in open interest showing more selling. Foreign institutional investors (FIIs) sold index futures worth Rs 1,356 crore on a net basis.
The India Volatility Index (or VIX) gained another 16 percent to close at 20.14, which is its highest level since February this year. As the Nifty dipped to lower levels, the 8,400 call saw writing of 24 lakh shares and the 8,200 call saw writing of 23 lakh shares. The 8,400 put saw unwinding of over 12 lakh shares in open interest.
Meanwhile, the FIIs unwound 13,398 index puts and added 7,939 index calls on net basis.