1. A flat day. Though the trading volumes are high, not much changes are visible either in the FII activity on Nifty Future OI. It is a pause day before both the bulls and bear camps plan their next course of action.
2. As said in the earlier posts, very high open interest in options for FII, and they would want some time decay to happen in the option premiums.
3. Having said that, the VIX still at a very high level, commanding high premium for options on both puts and calls. With only 10 trading days left in the series, time decay would accelerate in the options.
4. One of the interesting observations for the day is ... PCR at 1.27. The increase in PCR does need attention. It indicates more put writing is happening at all levels. As observed in the trading hours, the premium in puts decayed by 15-20% today. May be tomorrow a rally might ensure the put premium decay to be complete.
5. Do not get complacent with longs. Remember, smart money is short from levels above 5480 and they have a lot of cushion. They might induce a small rally for the weak shorts to cover and resume their activity. The steep increase in PCR without a corresponding meaningful rally is leading to this suspicion. As Shai says, cheap puts are never good for bulls.
You can read the complete datasheet here.
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