Rising put option sales reflect market fears as supply of shares exceed demand
Live MintMUMBAI : Market sentiment has taken a bearish turn with option traders selling or writing relatively fewer put options on the Nifty index. The call seller would have secured a profit of ₹343 from the premium initially paid by the call buyer, as the 24,300 call price dropped from ₹449 per share to ₹106 amid the market's decline. "The current PCR shows that markets are nearing the oversold zone and a reversal could be in order, but the market keeps falling, which reflects the heightened bearishness," said Rohit Srivastava, founder of IndiaCharts. "The accelerating pace of equity supply is the key reason domestic equity markets are again developing a vulnerability to the volatility in foreign flows," explained Ashish Gupta, chief investment officer, Axis Mutual Fund.
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