Nifty fell sharply to the 5400 level amid global uncertainties, with the last hour of trading showing better volumes and sharp moves. Market participants seem cautious as Nifty futures added over a million shares in open interest, indicating hedge creation. Stock futures are near record open interest levels, with 195 crore shares outstanding. Around 70% of stocks trade at a premium, showing a general upward bias but also potential pressure if macro risks grow. With the August expiry halfway through, experts recommend retaining long positions but pairing them with long puts to limit losses and keep upside open. According to Bhavin Desai, Manager (derivatives) at Motilal Oswal Securities, "Nifty August series open interest put-call ratio is at 1:58, indicating a moderately bullish composition." Low implied volatility suggests limited downside risk for August expiry. The 5300 August put holds support with over 10 million shares. Desai suggests a hedging strategy using a bear ratio spread: buying 1 lot of Nifty August 5400 PE and selling 2 lots of Nifty August 5300 PE. This earns profits if Nifty ends between 5200 and 5400 on expiry. If Nifty closes above 5400, the hedging costs are offset by cash inflow. Losses occur below 5200, a level expected to hold through August expiry. In summary, cautious optimism prevails as traders manage risks amid market swings.