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FII option bets hit record high: What is it signalling?

Sumary of FII option bets hit record high: What is it signalling?:

  • Option sellers have piled on record cumulative bearish bets on indices and stocks, signalling that more pain is likely, before things get better…
  • Marketwide open interest (OI) of calls exceeded the OI of puts by Rs 90883 crore on Tuesday, when the benchmark Nifty fell 1.3% to 14721…
  • Since for every buyer there is a seller in the derivatives market, futures and options are a zero sum game, with profit merely moving from one pocket to another…
  • Thus, when more calls are sold than puts, it means option sellers don’t expect the market to rise , enabling them to retain premiums for the calls paid by the buyers….

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