F&O Manual | Bearish pressure rises as traders see more downside

The overhang of more aggressive rate hikes from the US Federal Reserve kept market participants nervous on February 27. As of 10am, the Nifty index slid 0.75 percent to 17,333 points, dragged by auto, IT and metals.

Call writers were especially active as they tried to push the index lower. The 17,400 strike had the biggest call build-up, while Put writers were active most at 17,300 as they tried to fight it out.

Bars reflect changes in OI during the day. The red bars show Call option OI and the green Put option OI.

“It is a sell on the rise market,” said Ankush Bajaj, a derivatives trader and a Sebi registered research analyst. He added that he has bearish call on Nifty and Bank Nifty and sees the indices falling further lower.

India VIX – the volatility indicator – zoomed 4 percent to inch closer to 15 level.

All sectors saw short build up – a bearish phenomenon characterised by rise in open interest and fall in stock price. The number of stocks seeing short build-up was much more than those seeing a long build-up, which is reflected by rising open interest and price.

Zee Entertainment was among the stocks seeing the biggest bearish pressure followed by Adani Group stocks including Adani Enterprises. Mphasis, PVR, Bajaj Auto and Samvardhana Motherson were others that saw short buildup.

GAIL, Ipca Labs, Canara Bank and NTPC saw long buildup.

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