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Banking index climbed on Tuesday in line with the overall strong market amid consistent buying on the back of good corporate results so far. The Bank Nifty July futures contract ended sharply higher by 165.60 points at 26,879. The underlying value of the contract closed at 26,894.55.
Call Options of July 12 expiry
Among the call option chain, the In-The-Money Bank Nifty Call 26,700 option was the actively traded contract on Tuesday. The option price ended up 60.75 per cent at Rs 211. However, the OI in the contract shed 58.30 per cent.
Traders have pruned their positions in the contract despite an increase in option price. There was also lesser demand for the option as the implied volatility is comparatively lower at 5.96 per cent. It is an indication that the Bank Nifty is likely to get traction at this level in the short-term.
The Bank Nifty Call 27,000 option contract is currently an Out-of-The-Money option on Tuesday. The option price gained 80.50 per cent to Rs 57.50. OI in the contract was up 18.72 per cent with the IV at 12.08 per cent. This confirms that the Bank Nifty may test resistance around 27,100 levels in case of a further upward movement in this weekly expiry.
Put Options of July 12 expiry
On the put option chain, the In-The-Money Bank Nifty Put 26,900 option contract saw maximum increase in the open interest. The put option price was down 52 per cent at Rs 112, whereas OI zoomed by 1,224 per cent.
The implied volatility was at 14.78 per cent. This confirms that the underlying Bank Nifty is likely to get support around 26,750-26,800 levels in this weekly expiry.
The Out-Of-The-Money Bank Nifty Put 26,700 contract was another contract that has attracted major buying interest in Tuesday’s trading session. This put option price declined 67.45 per cent to Rs 38.35, while OI climbed by 266.90 per cent.
The option price was not so expensive with the implied volatility at 14.05 per cent. This indicates that the Bank Nifty is unlikely to decline below these levels in the July 12 expiry.
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