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The Bank Nifty index met with selling pressure and ended lower on Wednesday as investors sentiment was hurt by the continuing trade tensions between the US and China. The Bank Nifty index declined 78.35 points and closed at 26,816.20. The Bank Nifty July futures contract closed lower at 26,781.
Active call options of July 19 expiry
Among the call option chain the In-The-money Bank Nifty Call 26800 option was the actively traded contract on Wednesday. The option price closed at Rs 172.95, down by Rs 61.45 or 26 per cent. However, the OI in the contract has jumped by 69.50 per cent. Traders have bought some long-call positions in the contract as the option price fell in line with the decline in the underlying index. The implied volatility was comparatively lower at 8.36 per cent. This confirms that the underlying Bank Nifty may face stiff resistance around 27000 levels in next few trading sessions.
The Bank Nifty Call 27000 option contract is currently an Out Of The Money option that turned very active for this expiry on Wednesday. The call option price was down by 33 per cent to end at Rs 96. Interestingly, the contract’s OI rose by 90.75 per cent. The IV of the option price was at 9.45 per cent which signifies that this option is not expensive at these price levels. Since there was maximum addition of OI at this call strike, the underlying Bank Nifty index may encounter strong resistance around 27100 levels for this expiry in case of an upside move.
Active put options of July 19 expiry
On the put option chain, the in the money Bank Nifty Put 26900 option contract turned active on Wednesday. The put option price gained 8.50 per cent and ended at Rs 225.10. The OI surged 114.50 per cent for this contract. The implied volatility was comparatively higher at 13.40 per cent which implies that this contract price was in demand. This confirms that the underlying Bank Nifty is likely to get support around 26700 levels in this expiry.
The Bank Nifty Out-of the-money Put 26600 contract was the main focus of traders’ attention on Wednesday. This out of the money put option price gained 22 per cent and closed at Rs 113.50. The OI in the counter has jumped by 204.80 per cent. The IV of the option price was relatively higher at 14.25 per cent which implies that this option price was in keen demand. This confirms that the Bank Nifty underlying may get support around 26500 levels in this expiry.
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