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Markets fell on Thursday on the back of US-driven trade dispute and jump in oil prices amid sharp depreciation of rupee against the dollar.
The Bank Nifty July 26 expiry contract declined 158 points to end at 26,235. The underlying value of the contract closed at 26,324 on Thursday.
Active call options of July 26 expiry
Among the call option chain, the In-The-Money Bank Nifty Call 26000 option turned very active on Thursday. The option price closed at Rs 570, down 12.60%. However, the open interest in the contract had risen by 64 per cent.
The implied volatility was seen lower at 6.55 per cent, which denotes that there is lesser demand at this price. Hence, the underlying Bank Nifty may decline to 26,000 levels this month. On the upside, the underlying will encounter resistance at 26,500-26,600 levels in the short-term.
The Bank Nifty Call 26,500 option contract is currently an Out-Of-The-Money option that turned active on Thursday. The contract price closed down by Rs 71 or 19.10 per cent at Rs 302.
However, the OI rose 18.80 per cent with the implied volatility of the option price at 9.65 per cent which signifies that this option doesn’t attract large buying at these levels. This confirms that the underlying may face stiff resistance around 26,800 levels in case it moves above 26,500 levels.
Active put options of July 26 expiry
On the put option chain, the In-The-Money Bank Nifty Put 26,500 option contract was the most actively traded contract on Thursday. The put option price gained 76.85 or 16 per cent to close at Rs 553.15. The OI has improved by 6 per cent. The implied volatility was comparatively higher at 20 per cent which implies that this contract price was expensive.
Traders have bought this option contract expecting that the Bank Nifty to decline further. This confirms that the underlying Bank Nifty is likely to get support around 26,000 levels in the short-term.
The Bank Nifty Out-Of-The-Money Put 26,300 strike price turned active on Thursday. This Out-Of-The-Money put option contract gained Rs 79.10 or 21 per cent to Rs 456.60.
The OI in the counter gained 138.84 per cent with the IV of the option price comparatively higher at 19.30 per cent which suggests that the traders have a bearish outlook on the underlying Bank Nifty. Hence, it implies that the Bank Nifty may fall around 25,900 levels in the near term.
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