Anticipating the current back off to carry on for a few more days, futures and options (F&O) traders on April 08, 2009 relaxed their short positions at 3,300-3,400 call options.

These traders anticipated the Nifty to attain the 200 daily moving average (DMA) level of 3,443 sometime by the coming week and, hence, they developed long positions of 637,600 shares in 3,500 strike call options.

The open interest (OI) at 3,300 strike call options turned down by 540,850 shares, pointing that traders wanted the Nifty to trade above 3,300 going forward.

The 3,400 strike call options appended an open interest (OI) of 299,600 shares in spite of a trading volume of 7.55 million shares, signaling slowing down of shorts and build-up of fresh long positions at 3,400 call options.

The Nifty April futures saw short-covering of around 4 million shares in the intraday trade and build-up of new long positions of 2.75 million shares to close the day.

Nifty futures have been trading at a premium for almost three weeks at this time and hold an open interest of 40.92 million shares, the maximum since March 2008.

FIIs extended short positions and built up long positions ever since the April series began trading at a premium to the spot.

The Nifty in On Wednesday session took the vital support at 3,150 and rallied 200 points to close above 3,300.