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Stock markets fell from their intraday highs on Tuesday as manufacturing PMI fell to 51.7 against 52.3 in July. Late hour selling by market players pushed the Bank Nifty sharply lower on Monday.
Bank Nifty August contract had lost 254.10 points to end at 27,962.60 yesterday. The underlying value of the contract closed at 27,819.50. Nifty Private Bank index shed 1.16 per cent, while the Nifty PSU Bank index ended lower by 0.96 per cent.
Active call options of Sept 6 expiry
Among the call option chain, the In-The-Money Bank Nifty Call 27,800 option was the actively traded contract on Monday. The option price closed at Rs 186.50, down by 52.25 per cent. Open interest in the contract jumped 472.20 per cent as the traders have taken fresh long positions in the contract.
The implied volatility of the option price was seen especially higher at 16.36 per cent. This confirms that the underlying Bank Nifty may encounter stiff resistance around 28,100-28,150 levels in the short term.
The Bank Nifty Call 28,100 option contract is currently an Out-Of-The-Money option that turned very active on Monday. The contract price declined 67.90 per cent to Rs 60.
Traders have taken fresh positions with the OI witnessing an increase of 127 per cent. The IV of the option price was also quite higher at 15.45 per cent. This indicates that the underlying Bank Nifty is likely to meet strong resistance around 28,200 levels for the expiry in case of a volatile move.
Active put options of Sept 6 expiry
On the put option chain, the In-The-Money Bank Nifty Put 28,000 option contract was the most actively traded contract on Monday. The put option price gained 85.20 per cent to Rs 188. However, OI shed 27.50 per cent.
The implied volatility was comparatively lower at 8.70 per cent which implies that the traders have resorted to profit-booking. This confirms that the underlying contract is likely to fall below 27,800 levels in the short-term, with the support seen for the underlying at around 2,7600 levels.
The Bank Nifty Out-Of-The-Money Put 27,700 strike price was one of the most actively traded contracts on Monday. This Out-Of-The-Money put option price was up 67.40 per cent at Rs 60.60.
OI in the counter increased by 74 per cent. The IV of the option price was relatively higher at 11.80 per cent which suggests that the traders expect the underlying to decline. This confirms that the Bank Nifty underlying is likely to get support around 27,600-27,650 levels.
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