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Banking stocks had rallied on Monday pushing the Bank Nifty index higher on the back of buying by domestic financial institutions. The Bank Nifty August contract had ended higher by 179 points at 27,956.
The underlying value of the contract closed at 27,898.50. The Nifty Private Bank index gained 0.68 per cent, while the Nifty PSU Bank index rose 0.73 per cent.
Active call options of August 9 expiry
Among the call option chain, the In-The-money Bank Nifty Call 27,700 option was the actively traded contract on Monday. The option price closed at Rs 284.65, up by 68.45 per cent. Open interest in the contract declined by 47.75 per cent.
Traders have pruned their long positions ahead of the weekly expiry. The implied volatility was seen higher at 14.75 per cent. This confirms that the underlying Bank Nifty is likely to rally further and would encounter resistance around 28,200 levels.
The Bank Nifty Call 28,100 option contract of the Aug 9 expiry is currently an out-of-the-money option that turned very active on Monday. The contract price ended higher by 96 per cent at Rs 67.75.
OI in the contract saw 88 per cent increase as traders had taken fresh positions. The IV of the option price was at 13.05 per cent. This indicates that the underlying Bank Nifty is likely to meet strong resistance around 28,200 levels for the expiry.
Active put options of August 9 expiry
On the put option chain, the in-the-money Bank Nifty Put 27,900 option contract was the most actively traded contract on Monday. The put option price was down 46.80 per cent at Rs 119. However, the OI jumped 2,818 per cent.
The implied volatility was at 12.25 per cent. Traders have bought this option contract expecting the Bank Nifty to decline by the expiry. This confirms that the underlying may get traction around 27,700 levels in the short term.
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 fell 51 per cent to Rs 59.60.
Open interest zoomed 116.70 per cent. The IV of the option price was comparatively higher at 14.30 per cent which implies there was good demand for the contract at these price levels. This suggests that the Bank Nifty underlying is likely to get support around 27,600-27,700 levels for the expiry.
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