Manoj Murlidhar, AVP-derivatives, IIFL has stated his views on the bank Nifty and we quote and same are as appended below:
Yes, possibly. The open interest for Bank Nifty is somewhere close to 21 lakh. And that is almost three-six months high. Usually we do not see the open interest more than 14-15 lakh in Bank Nifty, when it's a normal trading session. But this time, if you remember, we had seen lot amount of short holds in the Bank Nifty, all the way from 10,200. Somewhere close to a 9,000, there was parallel long position that was formed in. One interesting thing, which we saw on Friday, after the RBI event, is the spread between the Bank Nifty and Nifty. This spread actually tells the rate of money which is coming in the Bank Nifty. So, we saw some short covering in Nifty and interestingly there was long position that was built-up in the Bank Nifty. Now we have the open interest somewhere close to 19-19.5 lakh. And this is preceded by two days of short covering. So, I feel Bank Nifty should be trading with a positive range. But 9,400 on the downside should be the max it might go and possibly a 9,900 might be on the cards. Absolutely. If you are looking at foreign institutional investor (FII) stats, almost Rs 4,000 crore is what they have bought in this contract. But the shorting in index is somewhere close to Rs 500 crore. In cash, they are managed to by around Rs 1,500 crore.
Trading in bank Nifty is extremely fruitful if one knows the pros and cons of trading in the future segment and Bank Nifty trading has non linear returns if executed under the guidance of an expert as a single move can bring lot of losses for the trader.
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