Options/futures data for 13th Sep (EOD)

1. This breakout has been an call options writers' "nightmare" for sure. For those who had made it habit of writing calls as a "free money collection" method last few months - this month has been a pay out time with interest!

2. To say that options picture with yesterday's action is bullish is an understatement. There was huge call covering at 5600/5700 and put writing at 5700 & 5800. The picture at 5700 is still not completely in favor of bulls 91L calls vs 59L puts. May be another 30L calls covering is needed there for sustaining 5700+

3. 5600 is also still not an extremely strong support yet. It needs another 10L-15L 5600CEs to be covered and an equal amount of 5600PEs to be written.

4. So the options picture now leaves us with range broad of 5500-5800 with 5600-5800 the spotlight range.

5. With yesterday's brutal attack from bulls PCR has inched up 1.6! Bulls are pushing the limits but they still have some room left to go before we hit 1.8+

I have a special chart for those who consider NAKED CALL/PUT writing as free money collection method:

THIS CHART SAYS -- NEVER EVER DO NAKED CALL WRITING!!! Look what happned to greedy call writers who wrote 5700CEs in the range of 5-8 rupees. Yesterday they owed 7-10 times more more. One may collect free money for couple of months by writing these options but eventually it will blow a big hole in the pocket for sure. So always consider backspread/ratio spread strategies.

Nifty Futures:

SEP: 3.88Cr OI up 1.6% -- Breakout with not so significant OI addition. May be initial burst was short covering. Need to see if OI addition happens this week.

OCT: 31.5L OI up 11%

Banknifty Futures:

27.3L - OI up 1%

Nifty profile from 5400-5770:

This is the composite profile from the day Nifty started rising from 5400 levels. VWAP is 5562 - shows bulls are very much in control. My observation is that eventually VWAP will be visited but no point in taking anticipatory shorts.