First Expiry Shows Speculative Traders Embracing Nifty Weekly Options

Nifty 50 weekly options ended with more than 3.15 times the volumes of the monthly options in the inaugural four-day week as speculative trading shifted to shorter-duration contracts.

Volumes in call options expiring on Feb. 14 was 3.4 times the volume of similar contracts for Feb. 28 expiry, according to data available on the National Stock Exchange website. Volumes of the weekly put contracts were 2.85 times the monthly options.

A call option gives the buyer the right to exercise the option if the underlying security rises above a specific price. A put option gives the right to sell if the price falls below a specific level.

Open interest, or the number of outstanding contracts, showed concentration in Nifty Weekly calls. Because the markets were weak, there were more call writers as opposed to put writers. As a result, open interest build-up was higher in weekly call options than put contracts.