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Bank Nifty index met with mild selling pressure and ended lower on Tuesday as traders were keeping an eye on the outcome of monetary policy review later today.
Bank Nifty index ended lower by 78.45 points at 27,764.15. Bank Nifty August futures contract closed at 27,810.65, with a 46-point premium to the underlying index.
Active call options of Aug 30 expiry
Among the call option chain, the In-The-money Bank Nifty Call 27,700 option was the actively traded contract on Tuesday. The option price closed at Rs 477.75, down by Rs 28.85 or 5.70 per cent. However, open interest in the contract jumped by 40.65 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 9.85 per cent. This confirms that the underlying Bank Nifty may face stiff resistance around 28,200 levels in the next few trading sessions.
The Bank Nifty Call 28,000 option contract is currently an Out-Of-The-Money option that turned very active on Tuesday. The call option price ended down by 5.75 per cent at Rs 324.95. Interestingly, the contract’s OI too declined by 28.50 per cent.
The IV of the option price was at 10.35 per cent which signifies that this option is not much in demand at these price levels. Hence, the underlying Bank Nifty index may rally up to 28,300 levels and is likely to encounter resistance around 28,300 levels in this expiry.
Active put options of Aug 30 expiry
On the put option chain, the In-The-Money Bank Nifty Put 28,000 option contract turned active on Tuesday. The put option price gained 4 per cent to Rs 507.60. Open interest surged 18.80 per cent.
The implied volatility was comparatively higher at 15.90 per cent which implies that this contract price was in demand. This confirms that the underlying Bank Nifty is likely to get support around 27,500 levels.
The Bank Nifty Out-Of-The-Money Put 27,500 contract was the main focus of traders’ attention on Tuesday. The option price closed down 21.85 per cent at Rs 290.90. Open interest in the counter jumped by 67.85 per cent.
The IV was relatively higher at 16.50 per cent which implies that this option price was in keen demand. This confirms that the Bank Nifty underlying may get support around 27,500 levels in this expiry.
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