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Futures and options traders are evidently bracing for a bearish March, at least in the early part, as the rollover of open interest positions from February to March indicates a short rollover.
The Nifty-50 futures witnessed a rollover of only 38 per cent, on the penultimate day of the expiry of the February contracts on the NSE. The battered Bank Nifty futures saw even fewer positions being rolled over to the next month’s series, at about 19 per cent.
These figures are much lower than in the previous months.
At the end of the last month’s series (on January 25), the rollover in the Nifty-50 was 73 per cent.
In the expiry week, aggressive call writing is seen in the 10,600 and 10,500 March calls, indicating that Nifty-50 may struggle to move past those levels. Similarly, the 10,200-10,000-strike puts of March series have added more open interest positions, signalling that the benchmark index could face support at those levels.
“Of late, FIIs have been selling at higher levels, signalling their discomfort in the market. They have been reducing long positions in index call options and adding short positions quite consistently, this series,” said a Chennai-based analyst.
FIIs add to short positions
As of January 24 (the penultimate day of the expiry), FIIs were holding 1,82,902 contracts of long positions on index futures and 1,74,039 of short positions. At today’s close, they were holding just 1,23,651 longs and 1,68,518 shorts, signalling their bearish mindset. However, the March series has a long duration, as the contracts expire only on March 28, which translates to almost 23 trading sessions.
VIX at elevated levels
“With India VIX, the volatility index that gauges fear in the market, still ruling at elevated levels, one can expect a further fall in the market, at least in the near future,” the analyst said.
However, IT counters witnessed positive rollover. Counters such as TCS (63 per cent), Infosys (73 per cent), Wipro (72 per cent) and HCL Technologies (60 per cent) saw a healthy rollover. Thanks to a sliding rupee, investors are betting on IT counters. The US dollar ended at 64.76/77 a unit against the rupee.
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