Interpretation of the market sentiment based on the latest open interest (OI) data from 03-Nov-2025 to 25-Nov-2025 (focus on the most recent 5-6 trading sessions + today).
Key Observations (as of 25-Nov-2025)
Participant
Index Futures Net OI
Direction
Options Net OI
Overall Positioning
FII
–94,689
Strong short
–3,10,062 (very heavy short, mostly short calls + some short puts)
Very Bearish
DII
+42,501
Long
Lightly involved in options
Moderately Bullish
Pro
–7,900
Mild short
–1,14,132 (short)
Mildly Bearish
Total Market
–60,088 (futures)
Net short
–4,24,194 (options)
Bearish
Very Important Recent Changes (last 4 sessions)
What FIIs did yesterday (24→25 Nov)
Date
FII Index Futures change
FII Options OI change
24-Nov
Added ~55,000 short contracts (from –1,61,697 → –94,689)
Added massive short calls/puts
Extremely aggressive short-covering in futures + fresh shorting in options (very bearish)
21-24 Nov
Were adding shorts aggressively in futures
Were unwinding option shorts (covering)
Mixed
25-Nov
Sudden reversal: covered a huge amount of index future shorts (55k+ contracts) while adding fresh option shorts
+2,85,559 contracts added (almost entirely short calls + short strangles)
Classic FII bearish pattern: “short-covering rally trap”
Interpretation of 25-Nov Action (Most Critical Day)
FIIs covered ~55,000+ index future shorts → this created upward pressure and helped Nifty recover ~400 points intraday and close higher.
At the same time, FIIs added a massive 2,85,559 option contracts (almost certainly short calls around 25,800-26,000 CE and short puts lower down) → they are selling the bounce aggressively.
This is a typical FII “bearish continuation” strategy: let the market rally a bit on short covering, sell fresh calls at higher strikes, collect premium, and prepare for the next leg down.
Overall Market Sentiment (as of 25-Nov-2025 close)
Timeframe
Sentiment
Strength
Reason
Very short term (1-3 days)
Mildly Bullish / Sideways
Medium
FII short covering in futures still has some room; Nifty/BankNifty bounced sharply today
Short-to-Medium term (1-3 weeks)
Strongly Bearish
High
FIIs remain heavily net short in both futures and options; fresh option writing on the upside is aggressive
Dominant force
FII bearish conviction is very high
They are willing to cover some futures shorts to induce rallies and then sell calls aggressively at higher levels (distribution mode)
Supporting Evidence
Cumulative FII index + option net OI is the most negative in the entire data set (–94k futures + –3.1 lakh options = very heavy short).
Highest single-day option OI addition in the entire period happened on 25-Nov (+2.85 lakh) — almost entirely short.
DIIs are long in futures but their size is only ~40-45% of FII shorts → not enough to counter FIIs.
Cash segment: FIIs sold on 24-Nov (-4171 cr) but bought mildly today (+785 cr) → typical behavior when they cover futures shorts.
Trading Implications / Likely Scenarios
Expected Nifty Range (next 5-10 sessions)
Scenario
Probability
Bearish continuation (most likely)
65-70%
25,300 – 25,600 (fresh downside after short-term bounce exhausts)
Sideways consolidation
20-25%
25,700 – 26,200
Sustained bounce (least likely)
10%
Only if FIIs flip to net long in futures (not visible yet)
Bottom Line (as of 25-Nov-2025)
The sharp bounce today is largely FII index-futures short covering and should be treated as a selling opportunity by positional traders. FIIs remain heavily bearish overall and are aggressively writing calls on every rise. Until FII index futures net OI turns positive or at least crosses –50,000, the path of least resistance remains downward or sideways-lower.
Sentiment summary in one line:
“Short-term relief bounce inside a medium-term bearish trend; FIIs are selling the rally via options.”
Anish J Parashar
Indirect tax india online research
Disclaimer:Content reflects personal views of the author and for trading and investment purposes consult with your financial advisor.
