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The Bank Nifty index continued its upward move on Wednesday due to FII buying and positive global cues. The Bank Nifty Futures August contract gained 192.50 points to 28,140.40. The August contract ended at a 78-point premium to its underlying Bank Nifty index.
Active call options of August 16 expiry
Among the call options for the August 16 expiry, the most active in-the-money call option was 27,900-call on Wednesday. The option price ended at Rs 308.35, gaining 42.30 per cent.
Open Interest was up by 49.90 per cent as traders added fresh positions. The Implied Volatility of the option price was at 10.55 per cent. This indicates that the underlying Bank Nifty may encounter strong resistance around 28,200 levels.
The out-of the-money 28,100-call traded very active. The option price was up 52.70 per cent at Rs 190.75. Open Interest increased by 175.55 per cent. The IV of the option price was at 10.75 per cent, which indicates that there was less volatility in the contract.
With the addition of OI in this call option, the underlying Bank Nifty is likely to encounter stiff resistance around 28,200-28,250 levels in case of further upside.
Active put options of August 16 expiry
In the put options side, the 28100 in-the-money put turned active on Wednesday. The option contract price declined 41.40 per cent to close at Rs 165.05. OI, however, surged 232.75 per cent.
Put Option buyers seemed to have taken fresh positions in the contract. The IV of the option price was at 10.70 per cent. This signifies that the Bank Nifty index may get support around 27,900 levels in the short term.
The 27,800 out-of-the money contract turned active. The option price was down 49.80 per cent at Rs 75. OI went up by 211.35 per cent with the IV of the option price higher at 11.85 per cent indicating that the option price was expensive.
Since there was significant addition of OI here, the underlying Bank Nifty index is likely to support around 27,700 levels, if it breaches 27,900-level from above.
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