S2Ep93 | The Pros Got Paid. But They Covered 8,206 Shorts And Bought Puts | 31st July Friday

Thursday the pros' long got paid. On Sensex expiry the index settled at 77,928, a whisker under the 78,000 lid, and Nifty closed 24,317. The pin path from episode 92 played out almost to the point: hold 77,700, drift into the lid on IT strength, don't chase. Roughly a 4 out of 5. But the whole story of episode 93 is the catch underneath that green close.Because this was not a broad rally. On the Nifty 50, twenty five stocks rose and twenty five fell, and the wider market was red, with the midcaps and smallcaps both lower. Autos carried it, up over 1.6 percent, with M&M up on a 34 percent jump in quarterly profit to 5,455 crore, Maruti, Tech Mahindra, Reliance and SBI helping. But realty fell over 2 percent, chemicals over 1, Adani Ports more than 3. The words the desks used were short covering and bargain hunting.And the official participant data proves it. Foreign funds walked into expiry net short 1,94,818 index futures and walked out at 1,86,612. They bought back 8,206 short contracts. That is the covering. But in index options they went net long 4,40,725 puts and net short 1,76,285 calls: they covered the futures short and bought downside protection at the same time. That is a house taking its foot off the short, not a house turning bullish. The pros leaned mildly long, net long the futures and long 1,32,067 calls. And retail sold the puts, net short 4,70,209 of them. Smart money is buying protection, the crowd is selling it.On flows, the two big buyers split: foreign funds bought 3,623 crore of cash, while domestic institutions sold 1,864 crore into the strength, after both bought on the 29th.That is why this episode teaches one thing you can use in real time: how to tell short covering from real buying, using open interest. Price up and open interest up is new money, conviction, follow through. Price up and open interest down is old shorts closing out, and once they are done the fuel is gone. Same green candle, two different engines.The plan runs on the fresh 04 August chain. Put writers built a floor at 24,000 and 24,200; call writers built a lid at 24,500 and 24,600, with about 31 lakh fresh calls sold at 24,500. Max pain sits at 24,250, PCR at 1.29, and the options price a weekly move of only about 220 points, a band of roughly 24,100 to 24,540. Above 24,400 pressing 24,500 on rising open interest, the real buyers showed up. Lose 24,200 and the 24,000 wall is next. On Sensex, 78,000 is the lid that must convert to a floor, 77,500 the shelf.Overnight the macro flipped friendly. Wall Street closed firmly higher, tech out front, and crude came off, Brent easing back to about 85 dollars from its 91 spike as the supply scare unwound with no real escalation. Asia is broadly green this morning, and GIFT Nifty points to a gap up open near 24,420, about 100 points above the close. Gold held near 4,090, the dollar eased, the rupee is steady near 95.70, and bitcoin sat quiet near 64,500. So the tape opens into resistance with the wind at its back, which makes the open itself the test: fresh buyers, or the same put holders fading the gift.And the bookend. Today is the last trading day settled the old way. From Monday the 3rd of August, SEBI retires the 30 minute average close for every stock with futures and options and replaces it with a single auction price, with a random cutoff so nobody games the last second. From Monday, the end of day auction window becomes the new pin zone.Listen live on rupeecase.com where it streams first, and on Apple Podcasts and Spotify. New episodes every trading day at 8:30 AM IST.