Foreign Investors Buy Index Calls As Nifty Makes New Record High
Index Futures See Fresh Long Positions As Nifty Hits New Highs
Foreign investors added positions in index call options on Tuesday, as major Indian equity indices made new record highs in what was otherwise a quiet day of trade. An addition of call options indicates expectations of indices going higher in the near-term.
Nifty 50 index’s May futures added 2.3 percent in open interest reflecting fresh long positions. Gains in the index were led by Tata Steel, Bharti Infratel and Indiabull Housing Finance. The Nifty Bank index, however, remained subdued and saw little change in its futures open interest.
The India Volatility Index (VIX) gained marginally but closed at 10.6 continuing to stay near record lows. Maximum open interest remains with the 9,300 call and the 9,500 put which indicates a near-term range for the Nifty. Should the Nifty continue to trade above 9,500, the range is likely shift upwards as traders move into expiry in the coming week.
Foreign investors added 16,695 index call options and 10,266 index put options on a net basis reflecting anticipation of indices moving upwards in the near term.
