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The Bank Nifty May futures contract surged 702 points to end at 26,953 for the May month expiry on Thursday. The underlying value of the contract closed at 26,956.20. The Nifty Private Bank index closed in positive territory, gaining 324 points or 2.18 per cent, while the Nifty PSU Bank index rose marginally by 0.35 per cent.
Call option for the June 28 expiry
Among the call option chain in the money Bank Nifty Call 26500 option turned very active. It rose 82 per cent to close at ₹576. However, open interest in the contract declined 7.50 per cent. This confirms that traders have shed some of their positions in the contract, following a sharp increase in the option price. Therefore, traders expect the underlying to fall to 26500 levels in the month.
The Bank Nifty Call 27,500 option contract is currently an out of the money option that was very active on Thursday. The contract price has risen by 159.45 per cent to end at ₹148.80. The open interest too jumped 282 per cent in tandem with the option price. Option buyers seemed to have built up fresh positions in the contract expecting the underlying to move ahead.
Put option for the June 28 expiry
In the put option chain, the in the money Bank Nifty Put 27,000 option contract was the most actively traded contract on Thursday. The put option price closed down 34.15 per cent at ₹565.10. However, OI for this contract has improved by 40.35 per cent. The implied volatility was high at 21.65 per cent, which implies that this contract price was expensive. Hence, traders have bought this option contract at lower levels.
The Bank Nifty put 26,500 contract was more active in Thursday’s trading session. This out of the money put option contract fell by 34.50 per cent to ₹345. The OI in the counter rose sharply by 56.50 per cent. While the option price declined in value, OI interest in the contract has gone up. Traders have taken fresh positions in this contract, implying that the underlying Bank Nifty is likely to fall around 26,500 levels before the month expiry.
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