BackIndian options traders sell more puts than calls before quarterly results
The number of puts per call was at 1.185, the highest level since 29 January
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Mumbai: Indian options traders sold more puts than calls for a 10th straight day before the quarterly earnings season begins this week.
The number of puts per call was at 1.185 at 3.42pm in Mumbai, the highest level since 29 January. The India VIX index rose 1.6% to 14.49 at the close. The CNX Nifty index and the S&P BSE Sensex both climbed 0.6% to five-week highs.
Traders were writing puts, or entering contracts that may bring them losses if stocks declined, in a show of confidence that equities will be supported, according to Anand Rathi Financial Services Ltd and Religare Securities Ltd. Tata Consultancy Services Ltd (TCS), the nation’s largest software company, and IndusInd Bank Ltd, are due to report their results for the January-March quarter on Thursday.
“We don’t expect big directional bets until the quarterly earnings trend is clear," Manoj Vayalar, assistant vice-president of derivatives at Religare Securities, said in a phone interview. “Traders are comfortable selling puts as the market is likely to trade range bound before earnings."
Earnings for the Sensex’s 30 companies fell in the three months ended December for the first drop in six quarters, data compiled by Bloomberg show.
Overseas investors purchased $38 million of stocks on 9 April, taking this year’s inflows to $6.2 billion. Foreigners sold a net $102 million of Nifty options on 10 April, according to data compiled by Bloomberg. The Nifty is valued at 16.3 times its projected 12-month results, compared with a multiple of 12.4 times for the MSCI Emerging Markets Index. Bloomberg
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