Nifty Fund Flow Clues March 2017!

While Nifty is in the range of 8800-9000 since almost a month Traders are keen about which direction it is going to take from current levels While it is important to understand what the market makers have in mind to predict the future movement.

I have made an attempt to explain the action in derivatives for the past 2 weeks while the nifty is preparing for its next break away move.

Here is a snapshot of the FII's action in derivatives for the past 2 weeks.
See the Pic above
Picture Courtesy: Vtrender.com

To brief what has been the activity in Derivatives FIIs are Net SHORT in Index Futures 8.5k Contracts (Net Bearish)

Net shorted Index calls 19k Contracts (Net Bearish)
Net Long in Index Puts 39k Contracts (Net Bearish)

Net Stock Futures shorted 70k Contracts (Net bearish)

While Nifty has been in the same range of 8800-9000 since past one month FIIs have been busy in adding Bearish positions in Derivatives segment though they have bought net in cash segment worth 7.5k Crores in the past two weeks whilst the Bearish positions added in the same time are worth more than 5k+ Crores.


So it is evident that the market makers are cautious at current levels and hedging their portfolios through bearish Derivative positions which is indicator that it is not preferable to take fresh longs at current levels and Risk reward is tilted to SHORT side based on the fund flows we are seeing as above.