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Short Build Up

Position SHORT BUILD UP-INDEX OPTION

Options

Futures

Calls

Puts

Symbol
Strike Price
Prev OI
Curr. OI (%Chg)
LTP (%Chg)

25,550.00

13,43,175

42,30,450

(214.96%)

113.1

(-44.15%)

26,550.00

8,88,975

23,91,900

(169.06%)

2.05

(-6.82%)

25,600.00

43,73,325

1,09,09,950

(149.47%)

91.8

(-46.22%)

26,450.00

13,10,550

31,10,250

(137.32%)

2.6

(-13.33%)

26,050.00

11,97,675

27,43,950

(129.11%)

10.7

(-51.36%)

25,500.00

36,78,375

84,19,200

(128.88%)

138.05

(-41.57%)

26,150.00

11,25,825

25,75,950

(128.81%)

6.85

(-46.69%)

25,950.00

12,62,925

28,71,900

(127.4%)

17.4

(-52.78%)

25,700.00

42,50,400

95,27,100

(124.15%)

58.4

(-50.21%)

25,800.00

40,64,025

90,21,150

(121.98%)

36

(-52.54%)

26,400.00

28,46,175

58,61,100

(105.93%)

2.85

(-25%)

26,600.00

25,14,900

47,58,450

(89.21%)

1.8

(-2.7%)

26,300.00

37,77,600

70,25,850

(85.99%)

3.6

(-38.46%)

26,100.00

31,01,250

56,10,525

(80.91%)

8.5

(-49.55%)

26,500.00

79,40,325

1,35,15,680

(70.22%)

2.3

(-13.21%)

25,850.00

15,70,425

25,56,225

(62.77%)

28.5

(-52.5%)

26,350.00

16,95,750

26,44,725

(55.96%)

3.15

(-32.98%)

25,450.00

6,53,025

10,18,425

(55.95%)

167.5

(-38.68%)

25,900.00

48,51,750

61,65,450

(27.08%)

22.15

(-52.67%)

23,800.00

9,525

10,050

(5.51%)

1,718.45

(-6.35%)

24,550.00

9,450

9,825

(3.97%)

965

(-12.39%)

Position SHORT BUILD UP-STOCKS OPTION

Options

Futures

Calls

Puts

Symbol
Strike Price
Prev OI
Curr. OI (%Chg)
LTP (%Chg)

1,960.00

475

2,37,025

(49,800%)

22.4

(-0.88%)

1,300.00

450

68,400

(15,100%)

116.8

(-22.88%)

7,450.00

125

6,375

(5,000%)

100.25

(-17.42%)

1,170.00

1,250

45,625

(3,550%)

53.1

(-25.42%)

2,480.00

300

6,300

(2,000%)

52.75

(-1.22%)

55,000.00

15

315

(2,000%)

85.3

(-62.13%)

1,290.00

10,625

2,18,125

(1,952.94%)

33.8

(-24.38%)

8,900.00

450

9,225

(1,950%)

79.4

(-46.21%)

560.00

1,650

28,050

(1,600%)

1.15

(-11.54%)

7,500.00

900

14,700

(1,533.33%)

90

(-22.51%)

1,470.00

7,500

1,17,500

(1,466.67%)

1.5

(-41.18%)

2,160.00

1,400

21,700

(1,450%)

6.8

(-6.21%)

1,120.00

5,400

83,700

(1,450%)

0.95

(-24%)

7,100.00

1,100

17,000

(1,445.45%)

196.15

(-10.54%)

12,300.00

350

5,400

(1,442.86%)

402.75

(-27.62%)

495.00

14,575

2,13,325

(1,363.64%)

11.3

(-1.31%)

2,840.00

900

12,000

(1,233.33%)

2

(-14.89%)

1,920.00

650

8,125

(1,150%)

3.25

(-27.78%)

7,550.00

125

1,500

(1,100%)

69.75

(-26.03%)

3,350.00

250

2,750

(1,000%)

37.55

(-22.9%)

1,160.00

2,500

25,625

(925%)

59.9

(-26.95%)

850.00

800

7,200

(800%)

1.15

(-28.13%)

3,580.00

700

6,125

(775%)

152.85

(-6.6%)

35,500.00

50

400

(700%)

91.95

(-30.76%)

7,000.00

6,000

47,400

(690%)

229

(-11.63%)

1,840.00

650

4,875

(650%)

7.55

(-9.04%)

247.50

10,14,750

74,16,000

(630.82%)

4.6

(-16.36%)

1,210.00

3,850

27,500

(614.29%)

3.4

(-46.88%)

7,200.00

2,200

15,100

(586.36%)

162

(-9.01%)

257.50

41,275

2,69,875

(553.85%)

5.7

(-0.87%)

12,700.00

800

4,900

(512.5%)

96.6

(-22.07%)

1,260.00

2,500

14,375

(475%)

51.2

(-20.56%)

1,540.00

10,500

60,000

(471.43%)

1.45

(-9.38%)

13,300.00

1,700

9,700

(470.59%)

59.15

(-38.22%)

1,080.00

6,600

37,400

(466.67%)

42.45

(-38.03%)

12,500.00

12,950

71,250

(450.19%)

295

(-31.28%)

270.00

3,77,825

20,54,225

(443.7%)

2.45

(-5.77%)

152.50

73,125

3,94,875

(440%)

2.5

(-1.96%)

1,860.00

3,150

16,800

(433.33%)

102.4

(-3.03%)

12,400.00

4,550

24,250

(432.97%)

346.5

(-28.42%)

2,800.00

1,500

7,800

(420%)

2.6

(-25.71%)

1,380.00

3,150

16,200

(414.29%)

66.5

(-27.48%)

2,600.00

250

1,250

(400%)

764.2

(-4.24%)

2,250.00

550

2,750

(400%)

154.3

(-12%)

1,540.00

8,000

39,500

(393.75%)

56.15

(-20.24%)

6,800.00

700

3,400

(385.71%)

310.05

(-11.73%)

1,780.00

13,600

65,600

(382.35%)

8.65

(-6.49%)

2,520.00

26,700

1,27,800

(378.65%)

2.35

(-16.07%)

2,780.00

3,900

18,300

(369.23%)

28.45

(-22.05%)

1,380.00

70,625

3,21,250

(354.87%)

0.9

(-41.94%)

1,380.00

3,200

14,000

(337.5%)

70

(-25.73%)

142.50

14,625

63,375

(333.33%)

7.55

(-5.63%)

13,700.00

6,350

27,450

(332.28%)

23.15

(-39.4%)

12,600.00

14,000

57,800

(312.86%)

250

(-31.27%)

8,890.00

1,650

6,675

(304.55%)

80.95

(-14.43%)

197.50

13,800

55,200

(300%)

0.95

(-13.64%)

880.00

1,875

7,500

(300%)

73.95

(-12.74%)

1,420.00

12,150

47,700

(292.59%)

47.95

(-28.54%)

1,400.00

25,650

99,900

(289.47%)

57

(-27.8%)

1,720.00

1,44,900

5,63,850

(289.13%)

20.9

(-24.28%)

2,180.00

94,800

3,68,800

(289.03%)

51.95

(-28.3%)

5,200.00

3,850

14,700

(281.82%)

14.8

(-3.9%)

1,480.00

51,250

1,82,500

(256.1%)

1.05

(-50%)

1,280.00

16,250

56,250

(246.15%)

38.75

(-22.73%)

1,740.00

6,400

21,600

(237.5%)

14.65

(-10.12%)

7,300.00

1,100

3,700

(236.36%)

134.9

(-14.32%)

1,250.00

29,150

97,350

(233.96%)

1.35

(-52.63%)

930.00

7,200

24,000

(233.33%)

37

(-14.65%)

3,080.00

750

2,500

(233.33%)

51.4

(-6.03%)

1,760.00

5,600

18,550

(231.25%)

46.9

(-12.58%)

1,740.00

4,375

14,375

(228.57%)

18.95

(-6.19%)

3,060.00

7,350

23,800

(223.81%)

36.75

(-9.82%)

1,100.00

91,300

2,92,050

(219.88%)

31.4

(-33.83%)

1,190.00

25,625

81,250

(217.07%)

40.35

(-26.7%)

6,450.00

600

1,900

(216.67%)

139.1

(-3.87%)

1,180.00

7,150

22,550

(215.38%)

20.5

(-20.85%)

405.00

16,600

51,875

(212.5%)

6.95

(-7.33%)

4,050.00

4,050

12,600

(211.11%)

194.55

(-29.89%)

162.50

29,250

87,750

(200%)

0.7

(-17.65%)

2,980.00

250

750

(200%)

103.3

(-1.81%)

3,720.00

91,875

2,65,825

(189.33%)

73.65

(-10.62%)

1,640.00

2,700

7,650

(183.33%)

85.3

(-16.33%)

6,900.00

3,900

11,000

(182.05%)

268.95

(-9.69%)

2,440.00

96,000

2,70,000

(181.25%)

2.2

(-38.89%)

1,180.00

26,400

74,250

(181.25%)

6.55

(-44.02%)

1,840.00

12,800

35,200

(175%)

4

(-3.61%)

247.50

12,000

33,000

(175%)

20.7

(-3.72%)

400.00

8,23,625

22,39,875

(171.95%)

15.85

(-1.55%)

820.00

63,750

1,71,250

(168.63%)

1.45

(-32.56%)

4,150.00

900

2,400

(166.67%)

248.5

(-4.62%)

1,680.00

1,125

3,000

(166.67%)

3.4

(-59.52%)

7,250.00

6,375

16,875

(164.71%)

183.1

(-15.41%)

1,280.00

5,950

15,725

(164.29%)

58

(-8.73%)

3,240.00

3,500

9,250

(164.29%)

11.4

(-5%)

82.00

54,600

1,43,000

(161.9%)

0.8

(-11.11%)

4,750.00

2,275

5,950

(161.54%)

4.4

(-40.54%)

1,780.00

47,250

1,21,450

(157.04%)

7.65

(-30.14%)

1,560.00

10,625

26,775

(152%)

2.75

(-5.17%)

3,650.00

5,075

12,775

(151.72%)

109.75

(-9.52%)

4,450.00

6,450

16,200

(151.16%)

105.95

(-1.03%)

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Premium

Discount

Script
Spot
Future
Premium(%)

WIPRO

266.01

266.10

0.03%

JSWSTEEL

1,020.50

1,020.90

0.03%

360ONE

1,194.50

1,195.00

0.04%

BHARATFORG

1,308.10

1,309.00

0.06%

KPITTECH

1,262.00

1,263.00

0.07%

What is a Short Build-Up?

Short Build Up is a market condition where open interest and trading volume of short positions increase while the price of the underlying asset goes down. This indicates that investors are turning bearish, expecting prices to fall even more. When traders are selling futures or options contracts, they expect to buy them back later at a lower price to profit from the difference. Hence, it means that more traders are entering short positions. Therefore, it heightens bearish sentiments in the market. For example, if the stock price falls by 3% whereas open interest increases by 10%, this might suggest a short build-up that indicates traders expect a continued trend of the stock's downward movement in value.

Awareness of this phenomenon is very important for the market participants because it appears to be an expression of the collective investor sentiment, which can hint towards the eventual trading opportunity. It can be a warning sign for long investors but gives opportunities to those looking to capitalize on the bearish trend. In general, it is only by understanding these short build-ups that traders can make the right decisions based on the prevailing market conditions and psychology of the investors.

Why Does It Happen?

Short build-ups happen due to several interrelated factors that reflect market dynamics and investor behavior:

  • 1. Negative Sentiment: Overall, bearish market sentiment on a stock or market segment serves as the trigger for selling short in response to a prognosis of a decline in stock prices. Unfavorable news on earnings, economic recession, or negative news concerning the stock are crucial factors.
  • 2. Hedging Strategies: A few investors who are holding long positions in an asset would like to enter short positions through futures or options in order to hedge against possible losses. This hedge creates a short build-up but does not signal pure bearishness.
  • 3. Speculative Trading: Traders may do short selling purely based on speculation as they feel an asset is overvalued and, therefore, has to correct itself. This speculative behavior further increases the short build-up as more and more traders enter the market by expecting a fall.
  • 4. Momentum Trading: When downward price momentum accelerates, fear can cause panic selling, which increases the short positions and intensifies the short build-ups.

These factors lead to short build-ups and reflect the overall broader market trends as well as investor psychology.

How Does It Help You?

Understanding short build-ups provides several advantages for traders and investors looking to navigate market conditions effectively:

  • Informed Decision-Making: Recognizing a short build-up allows investors to adjust their strategies accordingly. They may decide to enter short positions themselves or hedge existing long positions against potential losses.
  • Risk Management: By identifying strong bearish signals through significant short build-ups, traders can implement risk management strategies to mitigate potential losses. This could involve setting stop-loss orders or diversifying their portfolios.
  • Market Insight: Analyzing short build-ups enhances an investor's ability to interpret broader market dynamics and trends. It provides insight into market sentiment and potential future movements, enabling more strategic trading decisions.
  • Opportunity Identification: Traders can capitalize on price declines associated with short build-ups by timing their entries and exits effectively, potentially leading to profitable trades during bearish phases.

Recognizing and understanding short build-ups equips traders with valuable insights that can enhance their trading strategies and overall market engagement, ultimately improving their chances of success in volatile markets.

FAQs

What is a short buildup?

downArrow

A short buildup occurs when more investors enter short positions, anticipating a decline in asset prices. This situation often arises due to negative news or overvaluation, leading traders to sell futures or options contracts to profit from expected price drops.

What is the buildup rate?

downArrow

The buildup rate is a method used to determine an investment's capitalization rate by summing various risk factors and adding them to a risk-free interest rate. It helps calculate the expected return on an investment considering its specific risks and market conditions.

What happens when there is a short build-up?

downArrow

When there is a short build-up, the price of the underlying asset typically declines as more investors sell short. Increased open interest indicates that bearish sentiment is prevalent, which can lead to further price drops if the trend continues.

What is the difference between long unwinding and short buildup?

downArrow

Long unwinding involves selling existing long positions to realize profits or minimize losses, increasing supply and potentially lowering prices. In contrast, short buildup refers to increasing short positions, anticipating further price declines due to negative market sentiment.

How to identify short build-up in the option chain?

downArrow

To identify a short build-up in an option chain, look for increasing open interest alongside declining prices of the underlying asset. A significant rise in put option volume relative to call options can also indicate bearish sentiment and potential short positions being established.

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