Market Pulse
Derivatives & Participant Outlook for Monday
Date: May 23, 2025
Platform: Option Matrix India
As we approach Monday's trading session, a detailed examination of the latest market participant positions reveals significant cues that can shape our market outlook. Let's break down the activity across Client, DII, FII, and Pro segments, paired with a quick look into the cash market movements.
🔍 Futures and Options Data Analysis
📊 1. Clients (Retail + HNIs)
Clients have displayed a heavily bearish stance, especially visible in:
- Future Stock Long at -28,258 and Future Stock Short at -15,823
- Strong Put buying in the index segment (537,811 contracts long) vs Call shorting (305,836 contracts short)
- Huge Call shorting in stock options (-136,965) reveals defensive hedging or downside speculation.
➡️ Takeaway: Clients are positioning defensively with a strong tilt towards protective puts, suggesting they anticipate market downside or volatility ahead.
🏢 2. DIIs (Domestic Institutional Investors)
DIIs remain marginally active:
- Minor long buildup in Futures and Index options.
- Long stock futures at 3,317 and Stock put long at 5,482.
➡️ Takeaway: Slightly bullish or neutral, with minor hedging. Likely stabilizing flows but not driving direction.
🌏 3. FIIs (Foreign Institutional Investors)
FIIs have shown a strong bullish inclination:
- Future Stock Longs at 29,291, significantly outweighing shorts.
- Call longs (Index: 108,610; Stock: 22,260), with limited shorting.
- Net Long Contracts: 247,212 vs Short: 80,852
➡️ Takeaway: FIIs are buying into the market with confidence, especially evident in options where long calls outweigh shorts and minor put shorting suggests low volatility expectations.
📈 4. Proprietary Traders (Pros)
Pro players exhibit mixed signals:
- Heavy Index Call and Put longs suggest range-bound or high-volatility expectations.
- Stock Option activity shows long call bias (60,605 contracts) but some put hedges.
➡️ Takeaway: Pros are preparing for a volatile move but are not decisively directional.
💸 Cash Market Data – Strong FII Buying
- FII Net Cash Buy: ₹1,794.59 Cr
- DII Net Cash Buy: ₹299.78 Cr
This institutional buying is particularly encouraging. FII cash inflow of nearly ₹1,800 Cr adds strong undercurrent support to the bullish derivative cues.
📊 Participant Contract Share & Bias
| Segment | % Long | % Short |
|---|---|---|
| Client | 46.23% | 36.17% |
| DII | 1.98% | 21.59% |
| FII | 29.11% | 20.65% |
| Pro | 22.68% | 21.58% |
The higher long bias from FIIs (29.11%) and relatively low short exposure across the board indicates a constructive market sentiment.
📅 Monday Market Prediction: Bullish Bias with Volatility Risk
Considering:
- Strong FII long buildup and cash buying
- Neutral-to-slightly positive stance from DIIs
- Defensive Client positioning (potential contrarian signal)
- Volatility-prepping from Pros
We expect Monday to open on a positive note. However, volatility may rise mid-session, especially with Clients heavily hedged and Pros playing both sides.
🔔 Strategy Suggestions:
- Bullish bias traders can look for Call spreads or directional Call buys on key indices like Nifty and Bank Nifty.
- Range-bound or volatile players may consider Straddle or Strangle setups, particularly where Pros are active.
- Maintain tight stop-losses: volatility is likely.
Stay informed. Stay profitable.
Option Matrix India – Decoding Derivatives.