Market watch: What does the F&O market suggest about trade on December 7?

The Nifty 50 put call ratio (PCR) closed at 0.44 for the day.

Bears are looking to take a grip of the equity market now. For the second day in a row, they dominated the market. In today’s trade, Nifty 50 opened lower and fell throughout the day. At close, Nifty was down 284.5 points or 1.65 per cent to 16912. This was the lowest closing in three months. We have witnessed a sharp downward reversal of the last two sessions after a decent pullback. The template for the market has changed now and participants are selling on every rise.   

Activity on the F&O front for weekly expiry on December 09 shows 17500 to act as a strong resistance now. Highest open interest contract of 157587 stood at this strike price. The second-highest call option open interest 133541 for Nifty 50 stood at a strike price of 18000. In terms of the highest addition of open interest in the call options front, it was at 17200 in the last trading session. A total of 67630 open interest was added at this strike price.

In terms of put activity, the highest put writing was seen at a strike price of 16900 (22830 open interest added on December 6), followed by 16000 (15956 open interest added on December 6). Highest total put open interest (69645) stood at a strike price of 16000. This is followed by a strike price of 16500, which saw a total put option open interest of 56692 contracts. 

Following table shows the difference between call and put options at strike price near to max pain of 17050. 

The Nifty 50 put call ratio (PCR) closed at 0.44 for the day. A PCR above 1 is considered bullish while a PCR below 1 is considered bearish. 

The following graph shows the top five call and put option open interest and their strike price.