Bank Nifty reeled on Thursday due to fresh selling after the US Fed Reserve hiked the bank rate by 0.25 per cent. The US central bank has also warned of further rate hikes in the near future.

Taking cue from this, the Bank Nifty June futures contract had declined by 62 points to end at 26,575 on Thursday. The underlying value of the contract closed at 26,562.25. The Bank Nifty futures closed at a 13 point discount to the underlying value.

Active call options of June 28 expiry

Among the call option chain, the in-the-money Bank Nifty Call 26,400 option was the actively traded one on Thursday. The option price was down 14.75 per cent or Rs 65.75 to close at Rs 380.45. However, the OI in the contract shed 10 per cent.

This confirms that traders were unwilling to make any fresh commitments expecting a further downslide. The Implied Volatility of the option price is also comparatively lower at 10.90 per cent, which indicates there is lesser demand at this price.

The Bank Nifty Call 27,000 option contract is currently an out-of-the money option that saw a reasonably good buying interest. The OI in the contract has increased by 18.50 per cent whereas the option price fell by Rs 46.25 or 29 per cent at Rs 112.85.

The IV of the option price was at 11.65 per cent which is not very high. The accumulation of fresh positions in the contract only indicates that the Bank Nifty may encounter resistance around 27,000 levels in case of an upside.

Active put options of June 28 expiry

On the put option chain, the In-the-money Bank Nifty Put 26,700 option contract traded active on Thursday. The put option price gained Rs 13.60 or 4 per cent to close at Rs 347.40. The OI in the contract shed 9.70 per cent as traders booked profit on this contract.

The implied volatility was higher at 15.85 per cent indicating that the option price was quite expensive. This indicates that the underlying Bank Nifty may fall further from Thursday’s close at 26,562 levels.

The out-of-the money Bank Nifty Put 26,200 contract saw subdued interest.