Bank Nifty plummets as put option writers run for cover

Markets traded with a negative bias throughout the day as across-the-board short-selling was seen in all the major counters.

 

Metal stocks such as Tata Steel, Hindalco, and Jindal Steel & Power added fresh short positions, as the open interest soared higher along with a fall of ~2% in the underlying price.

 

Zee Ltd was the top index gainer, adding fresh long positions. The market breadth ended in the favor of declines with the advance/decline ratio closing at 2:3x.

 

Tracking the derivative data points, Bank Nifty Futures witnessed a marginal reduction in open interest, indicating an unwinding of long positions.

 

On the options front, Bank Nifty November 22, 2018, expiry contracts saw an unwinding of short positions in all the major put option strikes as option writers ran for cover. Bank Nifty 26200PE shedded ~90% of its open positions as the index plummeted ~1.25%. 

 

Stock Cash Tips