First the thumb rule for the data to form a view is presented below followed by today’s data and market movement.
- For BULLISH view – LONG in FUT + (Short in PUTS/long in CALLS) OR LONG in FUT + (Short in PUTS/unwinding in CALLS)
- For Bearish View – SHORT in FUT + (Short in CALLS/long in PUTS) OR SHORT in FUT + (Short in CALLS/unwinding in PUTS)
- For Neutral View – First Indication: Contradicting position in Fut at almost about the same prices with no follow-up activity from either LONG/SHORT fut side later in the day of Big qty. Second Indication: Short in options on both calls/puts and no major unwindings on near strikes.
Futures data
Puts data 10700 PE
Calls data 10700 CE
Based on the data you can observe the following
Futures data – More Longs than shorts and follow-up buying by 10:10 AM
PE data(10700PE) – Shorts in PE dominating
CE data(10600CE) – No significant shorts in CE
So the data was clearly pointing a LONG side trade and we rallied nicely towards 10800 later in the day.