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
Calls data
Based on the data you can observe the following
Futures data – Contradicting positions of 100k+ > First indication of Range-bound day
PE data(10600PE) – Longs addition in PE > Can’t be taken at face value considering contradicting position in index fut
CE data(10600CE) – Shorts + Longs in CE > Contradicting data again here > Indication of both sides OI addition
So the data wasn’t clear enough to go with one direction and that’s when one should expect range-bound movement and that’s exactly what Nifty did for the entire day stuck in range. On these kind of days only thing a trader can do is short the rises at prices where the big money shorted and buy the lows where big money has bought. If you notice the big money was shorting above 10590+ and buying below 10545 fut.