Banking shares met with heavy selling pressure yesterday after the RBI's Monetary Policy Committee (MPC) raised the repo rate by 25 basis points to 6.50 per cent. The Bank Nifty August contract declined 241.65 points and closed at 27,570 on Wednesday. The underlying value of the contract closed at 27,596.60, down 167.55 points.

Active call options of August 9 expiry

In the call option chain, the in-the-money Bank Nifty Call 27500 option was actively traded on Wednesday. The option price closed at Rs 223.25, down by Rs 170.25 or 43.25 per cent. However, the OI in the contract has risen sharply by 114.60 per cent. The implied volatility was comparatively lower at 8 per cent. This confirms that the underlying Bank Nifty is likely to face resistance around 27750-27800 levels in the short term.

The Bank Nifty Call 27800 option contract is currently an out-of-the-money option that turned active on Wednesday. The contract price was down by 53.15 per cent and closed at Rs 100. The contract’s OI has jumped by 127.60 per cent. The IV of the option price was at 9.87 per cent, which signifies that this option was in demand during yesterday’s session. The underlying Bank Nifty index is likely to encounter resistance around 27800 levels in the short-term.

Active put options of August 9 expiry

In the put option chain, the in-the-money Bank Nifty Put 27700 option contract traded stronger on Wednesday. The put option price gained Rs 106 or 57.55 per cent and closed at Rs 290. The OI has increased by 129.80 per cent for this contract. The implied volatility was significantly higher at 16.45 per cent, which implies that there is good demand at these price levels. It indicates that the underlying Bank Nifty is likely to get support around 27450-27500 levels in the short term.

The Bank Nifty out-of the-money put 27400 contract traded actively in Wednesday’s trading session, after the underlying index declined. This out-of-the-money put option contract rose 56.37 per cent and closed at Rs 143. The OI in the counter has jumped by 80.10 per cent. The IV of the option price was relatively higher at 15.45 per cent, which suggests that this option price is in demand. It signifies that the Bank Nifty underlying is likely get support around 27300 levels (if it falls below the 27,450 support mentioned earlier).

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