FIIs Buy More Index Puts Even As Nifty Remains Range-Bound
Traders Remain Wary, Add Index Puts As Indices Consolidate
There was further consolidation in India’s equity indices as the Nifty 50 index advanced only 0.1 percent on Thursday. There was little change in the index’s futures open interest. The Nifty Bank index retreated 0.7 percent, while its futures open interest fell 7.4 percent, indicating unwinding of long positions. Foreign institutional investors bought index futures worth Rs 600 crores on a net basis.
The India Volatility Index (VIX) fell 0.9 percent to close at 13.2 again reflecting small contraction in option premiums considering consolidation in the Nifty. Maximum open interest continued to build in the 8,500 put and the 9,000 call to broadly indicate a near term range for the Nifty.
FIIs bought more index puts on Thursday partly in order to hedge against a potential decline of major indices. They bought 13,017 index puts and in comparison, bought a smaller quantity of 1,028 index calls on a net basis.
The futures of Union Bank of India Ltd saw large accumulation of short positions eve as the stock fell 10 percent with its futures open interest surging nearly 40 percent. Shares of Page Industries Ltd which also fell 2.3 percent saw fresh short positions build up with its futures open interest rising 26 percent.
