Nifty options activity hints at positive market close today | Stock Market News

India’s benchmark equity index, the Nifty 50, reflected growing trader confidence on Thursday as its weekly contracts approach expiration. This optimism was underscored by significant selling of put options relative to call options at and below current index levels in morning trades, signalling expectations of market stability or an upward trend.

By 10am IST, as the Nifty traded near 23,200, traders had added 143,235 open contracts to the 23,200 put option. This pushed the total open interest to 201,102 contracts, marking a sharp 248% increase compared to Wednesday. Open interest represents the number of outstanding buy or sell positions held by market participants.

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A similar trend emerged in the 23,150 put option, where open interest surged by 297% overnight to 190,310 contracts.

“The jump in such outstanding positions on at- and out- of -the -money puts indicates a positive bias,” said SK Joshi, consultant at Khambatta Securities.

Joshi, who previously established the oil trading desk at BPCL during his tenure as finance director, noted that early trading patterns pointed to a green close for the Nifty.

When traders sell more puts than calls, it reflects confidence that the market will hold steady or rise, enabling sellers to pocket the premiums paid by buyers.

“Generally ,the trend of market direction is gauged by seller positions more than buyer position,” said Rajesh Palviya , derivatives head at Axis Securities.

Option writers, or sellers, are often seen as more experienced players in the market, as they assume higher risks than buyers. Historically, sellers have profited in 80% of trades, while buyers succeed only 20% of the time.

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A put seller is typically bullish, while a call seller tends to be bearish. Conversely, put buyers expect a market decline, and call buyers anticipate a rise.

On the call side, the 23,200 contract also saw significant activity, with open interest climbing 116% overnight to 218,225 contracts as traders added 117,173 positions. But, this was less than the put strike. 

“There seems to be a contest emerging between call and put sellers at 23,200, but early trends suggests a positive close for the market,” said Joshi.

He added that the stock markets appear to have priced in uncertainties stemming from US tariffs under the Trump administration, as well as muted expectations from India’s Union Budget, set to be presented on 1 February.

India’s stock markets had opened lower on Thursday, weighed down by consumer stocks after index heavyweight Hindustan Unilever projected near-term margin pressure due to slowing urban demand.

However, the benchmark Sensex soon recovered the losses and rose 152.54 points to trade at 76,557.53, while the Nifty climbed 37.10 points to 23,192.45.