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Banking stocks were lifted by the positive sentiment from investors yesterday as more public sector banks were seen lining up to enrol for a scheme for faster bad-loan resolution. Also, short-covering of positions, since yesterday being the last session of July expiry in the derivatives segment, drove the bank index higher.
Bank Nifty August futures contract climbed 357.60 points to 27,460. The underlying value of the contract closed at 26,406.60. The Nifty Private Bank index gained 136.65 points or 0.90 per cent to 15,381.20, while the Nifty PSU Bank index surged 160 points or 5.45 per cent to 3,095.90.
Active call options of August 30 expiry
Among the call option chain, the In-The-Money Bank Nifty Call 27,300 option was the actively traded contract on Thursday. The option price closed at Rs 533.55, up 49.70 per cent. Open interest in the contract jumped by 60.18 per cent.
Traders have taken fresh long positions in the contract. The implied volatility was seen comparatively lower at 9.40 per cent. This confirms that the underlying Bank Nifty may encounter stiff resistance around 27,800 levels for this August month expiry.
Bank Nifty Call 27,600 option contract for August 30 expiry is currently an Out-Of-The-Money option that turned very active on Thursday. The contract price increased by 63 per cent to Rs 383.35. OI saw 2,863 per cent surge as traders have taken fresh positions expecting the rally to continue further.
The IV of the option price was at 10.25 per cent. This indicates that the underlying Bank Nifty is likely to meet strong resistance around 27,800-27900 levels for the August 30 contract expiry.
Active put options of August 30 expiry
On the put option chain, the In-The-Money Bank Nifty Put 27,500 August 30 contract was the most actively traded contract on Thursday. The put option price was down 30.40 per cent at Rs 459. However, OI jumped 399.25 per cent.
The implied volatility was comparatively higher at 16 per cent which implies that there was good demand at these price levels. This confirms that the underlying may get traction around 26,950-27,000 levels for the August 30 expiry in case of reversal in the trend.
The Bank Nifty Out-Of-The-Money Put 27,200 August 30 contract was one of the most actively traded contracts on Thursday. This Out-Of-The-Money put option price fell 33.15 per cent to Rs 336.20. OI zoomed 702.50 per cent.
The IV of the option price was relatively higher at 16 per cent which suggests that the traders expect the underlying to decline. This suggests that the Bank Nifty underlying is likely to get support around 26,800-26,900 levels for the expiry in case of a decline.
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