The decline in Indian equity benchmark indices on Monday was bought into by foreign institutional investors (FII). Proprietary trading desks and FIIs increased their long positions in index futures helping indices to counter selling from retail investors. The Nifty Bank index futures however, saw unwinding of long positions indicated by a drop in open interest.
The India Volatility Index (VIX), which still trades near levels lowest since 2014, advanced for the first time in three days to move above 12 indicating expansion in option premiums on account of retreat in major equity indices.
Nifty options' open interest remained with the March 9,200 call and 8,800 put which broadly indicates a near term range for the Nifty. Trading activity in options remained subdued on Tuesday indicated by lower than average turnovers in the National Stock Exchange's derivatives segment.
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