OI unwinds above spot: Profit booking fuels uncertain momentum

The 26,000CE has highest Call OI followed by 25,600/ 25,800/ 25,500/ 26,500/ 26,300/ 26,200/ 25,650/ 26,300 strikes, while 25,500/25,400/ 25,450/ 25,550/ 25,300 strikes recorded modest to reasonable addition of Call OI. Call OTM strikes from 25,650 onwards (barring 25,850-26,000) witnessed marginal fall in Call OI.

The resistance level remained at 26,000CE for a third consecutive week. And the support level fell 200 points to 25,300PE.

The maximum Put OI is seen at 25,300PE followed by 25,000/ 25,400/25,200/ 25,350/ 25,250/ 25,500/ 25,100/ 24,800/ 25,300 strikes recorded reasonable to heavy build-up of Put OI. Put ITM strikes from 25,550 inwards recorded marginal to reasonable drop in Put OI.

Nifty and Bank Nifty hold higher OI, hinting at active trading ahead of expiry or event as both have high trading volumes and OI surge. Nifty recorded 13.52 per cent OI rise, indicating higher speculative interest in index derivatives. Steep drop in Call IV points to reduced bearish sentiment as Call writers are less worried about upside breakouts. Reduced fear of gap-up moves, the market doesn’t expect sharp upward volatility. Further, Call option premiums crashed.

Downside fear remains elevated as Put IV staying relatively firm despite marginal decline. Put buying/hedging continues and strong demand keeping Put premiums supported.

Market still pricing downside risk. Only marginal relief in bearish sentiment.

Dhirender Singh Bisht, Associate Vice-President (Technical Research – Equity), SMC Global Securities Ltd, said: “In the derivatives segment, the highest Call Open Interest for Nifty was observed at the 25,700 and 26,000 strike levels, whereas notable Put OI was concentrated at the 25,400 and 25,300 strikes. For Bank Nifty, significant Call OI was seen at the 58,000 strike, with substantial Put OI at the 58,000 strike.”

Increased Call writing at ATM and OTM strikes suggesting expected resistance level at higher bands. Analysts forecast weekly expiry beyond 26,000 level and higher levels can lead to creating short positions.

“Bank Nifty consolidated at higher levels and closed the week on a positive note with marginal gains, whereas Nifty witnessed some correction and ended the week with a loss of around one per cent, primarily due to concerns over FII outflows during the week. Sector-wise, capital markets, PSU banks, and financial services stocks closed in the green, while media, consumer durables, and defence sectors ended the week in negative territory,” added Bisht.

For the week ended November 7, 2025, BSE Sensex closed at 83,216.28 points, a net loss of 722.43 points or 0.86 per cent, from the previous week’s (October 31) closing of 83,938.71 points. NSE Nifty too moved down by 229.80 points or 0.89 per cent to 25,492.30 points from 25,722.10points a week ago.

Bisht forecasts: “Some profit booking was seen in Nifty, which has retraced about 50 per cent within the upward channel on the daily charts. Bank Nifty continues to consolidate at higher levels on the weekly charts. The long-term trend for both indices remains intact and continues to be bullish.

As President Trump mentioned plans to visit India soon for further trade discussions, any positive developments on that front could provide upward momentum to the markets. Traders are advised to closely monitor geopolitical developments in the upcoming sessions. Support for Nifty is placed at 25,200 and 25,000 levels, while resistance is seen around 25,800.”

Negative Call OI changes at most strikes above spot indicates Call unwinding or short covering. This suggests bullish undertone as Call writers are closing positions. Exceptionally high volume indicates active trading. High volumes with negative OI changes suggest profit booking by Call sellers.

Call IVs ranging from 7.68% (25,500) to 8.83% (25,900), relatively low, indicating stability expected.

India VIX rose 1.19 per cent to 12.56 level. India VIX rose marginally to close the week above 12 level and it may remain on a higher side due to ongoing volatility. A move beyond 13 may bring further weakness in the equities.

“Implied Volatility for Nifty’s Call options settled at 10.59 per cent, while Put options concluded at 11.85 per cent. The India VIX, a key indicator of market volatility, concluded the week at 12.41 per cent. The Put-Call Ratio of Open Interest stood at 1.04 for the week,” remarked Bisht.

Heavy Put buying indicates strong hedging or bearish positioning. This suggests traders are protecting downside aggressively. Extremely Put high volumes confirms genuine Put buying rather than unwinding. Put premiums increasing despite high volumes indicates strong demand.

Put IVs slightly higher than Calls (8.47% to 11.52%). Higher Put IVs suggest market participants pricing in downside risk.

FIIs net short positions in index futures rose once again in the last couple of sessions amid delivery-based selling from FIIs. However, a move beyond 26,000 level may trigger the short covering move. Failure to move above these levels, Nifty may move towards 25,500 level once again.

Bank Nifty

Bank Nifty, NSE’s banking index, closed the week at 57,876.80points, further up 100.45 points or 0.17 per cent from the previous week’s closing of 57,776.35 points. “For Bank Nifty, significant Call Open Interest was seen at the 58,000 strike, with substantial Put Open Interest at the 57,000 strike,” said Bisht.