Markets moved higher on Tuesday as the global sentiment improved after the US and North Korea signed the denuclearisation pact.

Inflation and industrial growth numbers came in after market closing hours. The good news is that industrial output grew 4.9 per cent in April. However, retail inflation, had increased to 4.87 per cent in May.

The Bank Nifty Futures June contract gained 153.55 points to close at 26,636 levels. The contract is trading at a premium of 29 points to its underlying Bank Nifty index which ended at 26,607.

Sectoral indices related to Bank Nifty also ended with significant gains. The Nifty PSU Bank index ended up 70.65 points or 2.33 per cent at 3,099.90 levels and the Nifty PVT Bank index closed higher by 59.80 points or 0.40 per cent at 15,054 levels.

Active call options of June 28 expiry

The most active in-the-money call option was 26,500-call on Tuesday. The option price ended at Rs 395, gaining Rs 75.80 or 23.75 per cent. The Open Interest was shed 2.45 per cent in this contract.

The Implied Volatility of the option price was relatively lower at 12.15 per cent, which denotes that there was subdued interest in the contract. It indicates the underlying Bank Nifty may get support at around 26,500 levels in case of any downside in the short-term.

The out-of the-money 27,000-Call was another actively traded call option here. The option price gained Rs 35.70 or 26 per cent to close at Rs 169.85 on Tuesday. However, the Open Interest was shed by 2 per cent.

The Implied Volatility of the option price was comparatively lower at 12.80 per cent. This signifies the underlying Bank Nifty may rally up to this 27,000 level in the short-term since the OI was reduced in the strike price.

Active put Option of June 28 expiry

In the Put options side, the 26,800 in-the money Put was active and it was up Rs 9 to close at Rs 517.45. The OI in this contract had gone up sharply by 37 per cent.

The implied volatility of the option price was sharply higher at 21.50 per cent. It signifies that there was good demand for this contract.

The Bank Nifty index may rise from the current levels to reach 26,800 levels in the short time-frame.

The 26,500-Out of the Money Put option is the most actively traded contract on Tuesday. The Put option price closed at Rs 265.80, down by Rs 76.40 or 22.33 per cent. The OI in the contract dropped just by 3 per cent.

Traders were unwinding their long positions. The Implied Volatility of the option price was at 16.56 per cent indicating quite a reasonable demand in the strike price. This option chain signifies that the underlying Bank Nifty index may fall around 26,500 levels in the short term.