Markets witnessed wild swings throughout the week with both Nifty and Bank Nifty indices closing with ~1% gains. A marginal hint of long build-up formation was seen in the Nifty index as the index recovered from its crucial support level of 11,100.
India VIX index closed ~2.5% lower at 17.15. Tracking the FIIs speculative index future positions, the long/short ratio hovered around 0.5x during the week, as the positioning continued to favour the bears.
On the options front (October 17, 2019 expiry), both Nifty and Bank Nifty could find buying interest around the support zone of 11,100 and 27,500, respectively. For the next week, long gamma spreads will continue to remain the flavour as the indices are expected to remain volatile. Traders should avoid writing plain-vanilla options as the sharp move in the underlying price can yield negative payoffs.
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