Pre Market Report, February 18, 2016 | Stocks and Commodities

February 18, 2016
Time: 9.20 am

Pre Market Report:

1. US markets closed positive for third day in a row.
2. Dow was up by more than 200 points in all three days.
3. So optimism is returning to global markets.
4. Crude prices are up.
5. Asian markets are up.
6. But for us, the trouble is still there.
7. One, FII selling is not subsiding, they have been selling more than 500 crores everyday.
8. Second, intraday volatility is killing the traders.
9. Yesterday only I mentioned that Nifty might be stuck in the range 7000-7200, but yesterday itself 7000 was broken.
10. But yesterday markets were up due to good quality stocks like Infosys, ITC, Reliance, etc.
11. So unlike last rally which was sold into within days, this rally may sustain at least for three to four days.
12. With only 6 trading sessions left for the expiry, Nifty 7000 Put has the highest open interest among Puts.
13. Highest open interest among Calls is at 7400. 
14. Option premiums are likely to fall as both Time Value and Volatility value are favour of option writers.
15. Only the price value, violent movements in pries, is yet to go in favour of option sellers.
16. Usually there will be some huge volatility either on Thursday or Friday, the week before the expiry.
17. But that may not be the case this time as the markets were highly volatile in the last two to three weeks.
18. If FII selling is not subsiding, then the cap is at 7300 for Nifty for this expiry.
19. Support may be at 7000. Once can sell Nifty 6900 Put and 7400 Call to capture the sideways movement in this range.