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Banking stocks continued its downward spiral move on Wednesday too largely dragged down by rupee woes, unabated foreign fund outflows and escalating trade tensions between the US and China.
Bank Nifty index plunged 366.20 points to 26,454.10. September futures of the Bank Nifty closed at 26,389.25, at a discount of 65 points to the underlying index.
Active call options of Sept 27 expiry
Among the call option chain, the in-the-money Bank Nifty Call 26,200 option was the actively traded contract on Wednesday. The option price closed at Rs 312.40, down by 33.75 per cent.
However, open interest in the contract increased by 2,314 per cent (an addition of 12,960 shares). The implied volatility was moderately higher at 15.45 per cent. This confirms that the underlying Bank Nifty is likely to encounter strong resistance around 26,500-26,600 levels in the short term.
Bank Nifty Call 26,500 option contract is currently an out-of-the-money option that turned active on Wednesday. The contract price was down by 48.45 per cent at Rs 137.
OI witnessed an addition of 4.03 lakh shares, up by 333 per cent. Implied volatility of the option price was at 13.40 per cent which signifies that this option was not so expensive. The underlying Bank Nifty index is likely to face strong resistance around 26,700 levels for this expiry.
Active put options of Sept 27 expiry
On the put option chain, the in-the-money Bank Nifty Put 26,400 option contract traded very active. The put option price gained 10 per cent to Rs 201.70. OI surged 279 per cent with an addition of 1.19 lakh shares.
The implied volatility was comparatively lower at 10.75 per cent. This indicates the underlying Bank Nifty is likely to get support around 26,175-26,200 levels.
Bank Nifty out-of the-money Put 26,200 contract was the main focus of traders’ attention on Wednesday. This contract edged lower by nearly 2 per cent to Rs 122.70.
OI jumped by 137.70 per cent with an addition of 2.60 lakh shares. Implied volatility was moderate at 11.75 per cent. Hence, it implies that the Bank Nifty underlying may get support around 26,100-26,000 levels.
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