Market Sentiment Analysis Based on Open Interest (OI)
The data spans from November 3 to November 18, 2025, focusing on Nifty 50 and Nifty Bank indices. Open Interest (OI) reflects the net positions of institutional players: positive net OI typically indicates long (bullish) bias, while negative indicates short (bearish) bias. I've analyzed trends in futures and options OI for FIIs (Foreign Institutional Investors), DIIs (Domestic Institutional Investors), and proprietary traders, alongside cumulative net OI, daily OI variations, cash flows, and index price changes.
Key insights:
- Overall Trend: Nifty 50 closed at 25,910 on Nov 18 (down 103 points from Nov 17), after a volatile period with a net gain of ~147 points since Nov 3. Cumulative futures OI remains deeply negative (-106,371 on Nov 18), signaling dominant short positions. However, DIIs' bullish activity is countering FII bearishness, leading to mixed sentiment with cautious optimism in the short term.
- Futures OI Sentiment: Bearish dominance from FIIs, offset by DII longs.
- Options OI Sentiment: Heavy short positions (negative net), suggesting hedging or bearish bets, but recent unwinding indicates potential stabilization.
- Cash Market: FII selling pressure vs. DII buying support, aligning with OI trends.
Summary Table: Key OI Trends and Sentiment Indicators
| Date | Nifty 50 Close | Nifty Change | FII Futures Net OI | FII Futures Change | DII Futures Net OI | DII Futures Change | Cumulative Futures Net OI | Cumulative Futures Change | FII Options Net OI | FII Options Change | Cumulative Options Net OI | Cumulative Options Change | FII Cash (₹ Cr) | DII Cash (₹ Cr) | Daily Sentiment |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025-11-03 | 25,763 | - | -6,154 | - | 603 | - | -9,137 | - | 19,958 | - | 99,892 | - | -1,883 | 3,516 | Neutral (Low volume) |
| 2025-11-04 | 25,597 | -166 | -135,218 | -129,064 | 38,038 | +37,435 | -102,745 | -93,608 | -231,981 | -251,939 | -457,910 | -557,802 | -1,067 | 1,202 | Bearish (FII short build on price drop) |
| 2025-11-06 | 25,509 | -88 | -137,854 | -2,636 | 39,219 | +1,181 | -100,380 | +2,365 | -264,384 | -32,403 | -473,450 | -15,540 | -3,263 | 5,283 | Bearish (Continued FII shorts) |
| 2025-11-07 | 25,492 | -17 | -152,091 | -14,237 | 38,941 | -278 | -109,095 | -8,715 | -264,059 | +325 | -367,461 | +105,989 | 4,581 | 6,674 | Mildly Bearish (FII shorts deepen) |
| 2025-11-10 | 25,574 | +82 | -156,707 | -4,616 | 38,812 | -129 | -108,207 | +888 | -262,622 | +1,437 | -387,763 | -20,302 | -4,114 | 5,805 | Neutral (Price up, but OI stable) |
| 2025-11-11 | 25,694 | +120 | -159,830 | -3,123 | 38,841 | +29 | -113,284 | -5,077 | -222,413 | +40,209 | -329,973 | +57,790 | -803 | 2,188 | Bullish Tilt (DII longs on price rise) |
| 2025-11-12 | 25,875 | +181 | -162,240 | -2,410 | 49,922 | +11,081 | -103,811 | +9,473 | -162,881 | +59,532 | -179,147 | +150,826 | -1,750 | 5,127 | Bullish (DII build + price surge) |
| 2025-11-13 | 25,879 | +4 | -159,947 | +2,293 | 49,920 | -2 | -96,919 | +6,892 | -204,720 | -41,839 | -274,646 | -95,499 | -383 | 3,091 | Neutral (OI unwinding) |
| 2025-11-14 | 25,910 | +31 | -169,619 | -9,672 | 54,005 | +4,085 | -106,049 | -9,130 | -246,488 | -41,768 | -360,238 | -85,592 | -4,968 | 8,461 | Bearish Tilt (FII shorts on mild up) |
| 2025-11-17 | 26,013 | +103 | -169,285 | +334 | 53,680 | -325 | -105,928 | +121 | -199,527 | +46,961 | -223,154 | +137,084 | 442 | 1,465 | Bullish (Price up, FII shorts ease) |
| 2025-11-18 | 25,910 | -103 | -168,789 | +496 | 53,772 | +92 | -106,371 | -443 | -244,613 | -45,086 | -362,462 | -139,308 | -728 | 6,156 | Cautious (Price drop, OI stable) |
Detailed Sentiment Breakdown
- FII Perspective (Bearish Bias):
- Futures: Net short positions escalated from -6k (Nov 3) to -169k (peak on Nov 17), with ~$1.3B equivalent short build early in the period. Recent easing (+496 on Nov 18) suggests minor short covering, but overall bearish.
- Options: Deeply negative net OI (-244k on Nov 18), indicating short calls (bullish if for premium, but contextually bearish hedging). Unwinding on up days (e.g., +47k on Nov 17) shows reduced caution.
- Cash: Net outflow of ~₹11,000 Cr over the period, with selling on 8/11 days. Supports bearish view.
- DII Perspective (Bullish Counterbalance):
- Futures: Net long build from 603 to 53,772 (+5,300% growth), with consistent additions (e.g., +11k on Nov 12). This absorbed FII shorts, stabilizing cumulative OI.
- Options: Less pronounced, but positive shifts (e.g., pro options from -236k to -118k recently) hint at defensive buying.
- Cash: Net inflow of ~₹46,000 Cr, buying on 9/11 days. DIIs are the key support amid FII exits.
- Cumulative & Price-OI Dynamics:
- Futures: Negative cumulative OI (-106k) with daily variations showing short covering on up days (e.g., +121 OI change on Nov 17 price +103) – bullish long accumulation. On down days (e.g., Nov 18), OI deepened (-443), signaling fresh shorts.
- Options: Extreme volatility (from +99k to -473k), but recent net negative (-362k) with large unwinds (+137k on Nov 17) suggests reduced fear (bullish).
- Nifty Bank mirrors Nifty (up ~1.4% overall to 58,899), with similar OI patterns.
Overall Market Sentiment Suggestion
- Short-Term (Next 1-2 Weeks): Cautiously Bullish. DII buying and FII short covering are propping up prices despite FII bearishness. Watch for Nifty hold above 25,800; break below could trigger FII-driven downside.
- Medium-Term: Neutral to Bearish. Persistent FII outflows and negative cumulative futures OI point to vulnerability if global cues weaken (e.g., US rates). Options OI buildup signals hedging, not conviction.
- Recommendations: Monitor Nov 19-21 for OI changes. Bullish if DII futures longs exceed +5k/day; bearish if FII shorts rebuild below -170k.
This analysis uses standard OI interpretation: rising OI + price up = strong bull; falling OI + price up = weak bull (short cover).
Anish Jagdish Parashar
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