Market watch: What does the Futures and Options market suggest about trade on May 10?

Taking cues from SGX Nifty, the Indian equity market opened with a gap down of 183.55 points in today’s trade. Later on, all the efforts of the market throughout the day to recover faced selling pressure. Nifty 50 opened at 16227.70 against the previous close of 16411.25. It finally closed with a loss of 109.4 points or 0.67 per cent at 16301.850. Global equity markets are also trading with a cut as fears of an economic recession rising inflation and a slowdown in the world’s second-largest economy will hurt the global economy. Volatility continues to increase and Nifty VIX in today’s trade opened at 21.25 and closed at 22.03 with a gain of 3.68 per cent. 

Activity on the F&O front for weekly expiry on May 12 shows 17000 to act as a strong resistance now. Highest call open interest contract of 172042 stood at this strike price. The second-highest call option open interest 115014 for Nifty 50 stood at a strike price of 16500. In terms of the highest addition of open interest in the call options front, it was at 16500 in the last trading session. A total of 53463 open interest was added at this strike price.

 In terms of put activity, the highest put writing was seen at a strike price of 16000, where 55373 open interest was added today, followed by 16200 strike price where (43333) open interest was added. Highest total put open interest (120221) stood at a strike price of 16000. This is followed by a strike price of 15100, which saw a total put option open interest of 93075 contracts. 

The Nifty 50 put call ratio (PCR) closed at 0.56 for the day. A PCR above 1 is considered bullish while a PCR below 1 is considered bearish. 

Max pain at the end of today's trade for weekly expiry on May 12 stands at 16400. 

Top five call and put open interest with their strike price