Markets came under considerable selling pressure last week and consequently, Nifty 50 lost 3.5 per cent and Nifty Bank depreciated by nearly 2.1 per cent.

Looking at cumulative open interest (OI) of futures contract of Nifty on the NSE, it has dropped to 113.8 lakh contracts from 115 lakh contracts a week ago. Similarly, the Nifty Bank index has seen a drop in OIs to 21.4 lakhs contracts from 24 lakh contracts by the end of the preceding week. Thus, both the indices seem to have witnessed long unwinding over the past week.

In Nifty options (27th January 2022 expiry) 18,000 strike call option (18000-CE) is the most active with 1,81,388 contracts. Likewise, 17,000 strike put option (17000-PE) is the most active among the puts with 1,13,182 contracts. Notably, 17900-CE, 18500-CE and 19000-CE have more than 1 lakh outstanding OIs. So much of call writing means the market participants are not expecting any significant rally at least during this expiry and these prices can act as resistance levels. On the other hand, 17,000 can be a good support as the corresponding put option has seen good amount of selling.

Similarly, in Nifty Bank, 38,000-CE is where most activity is occurring with 86,385 OIs. At the other end, 37000-PE has attracted more participants in puts options with 52,391 OIs. This suggest that the Nifty Bank is likely to end this expiry within 37,000 and 38,000.

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