FIIs Add Index Puts Even As Nifty Continues To Consolidates
The India VIX gained 2.2% to close at 15.4 indicating expansion in option premiums.
Indian equity benchmarks declined on Tuesday, as domestic investors sold shares while foreign funds turned net buyers after a long gap.
The Nifty 50 Index just shy of 8,400-mark as it witnessed unwinding of positions, which was reflected by a 2.3 percent fall in its open interest (OI). The Nifty Bank Index snapped its eight-day gaining streak to decline marginally with some unwinding of positions in its January futures. Foreign institutional investors sold index futures worth Rs 170 crore on a net basis.
For the second straight day, the India Volatility Index (VIX) advanced despite consolidation in major indices. The India VIX gained 2.2 percent to close at 15.4 indicating expansion in option premiums. Ordinarily, gains in the VIX with indices remaining range-bound is followed by larger moves on the benchmarks.
Sustained consolidation has led to maximum OI shift to the 8,300 put and 8,500 call. FIIs continued to pile on more positions in index puts (9,603 contracts) relative to index calls (6,199 contracts) on a net basis.
