Informist, Monday, Sep 18, 2023
By Padmini Dhruvaraj
MUMBAI – The options chain indicates that the Nifty 50 is stuck in a range with a bias towards the bears. The put options premium of at-the-money strike rose, while those of call options declined.
The Nifty 50 fell today, snapping a three-day gaining streak, as the global mood towards the equity markets soured ahead of the US Federal Reserve’s policy meeting on Wednesday. The 50-stock index ended 0.3% lower at 20133.30 points.
“Along with concern over rising global crude oil prices and uptick in dollar index and US treasury yields, investors trimmed their exposure ahead of the outcome of the US FOMC (Federal Open Market Committe) meeting on interest rates on Wednesday,” said Shrikant Chouhan, head of research at Kotak Securities.
As the index fell in the spot market, investors increased some short positions. The put options premium of 20100 rose 18% to 51.35 rupees. The strike also had the highest net change in open interest with 1.63 new positions being added.
However, the premiums of in-the-money put options and out-of-the-money options fell, indicating that the Nifty 50 is stuck in a range. Meanwhile, some aggressive put selling was seen at 19000, 19500, and 19800 strike prices.
“People will likely start covering short positions only if Nifty (Nifty 50) goes above 20300 points,” said Jay Vora, a senior technical and derivatives analyst at Indiacharts.com.
On the call options front, analysts said writing was higher between 20100 and 20200 strike prices. The premiums of the 20150 strike fell 51.9% to 63 rupees, while those of the 20200 strike fell 59.7% to 40.05 rupees.
However, the 20200 strike price had the highest open interest addition of 4.13 mln. Additionally, some aggressive call options selling was seen at 20400, 20500, and 20600 strike prices.
The September futures contract of the Nifty 50 today closed at a premium of 36.70 points to the spot index. Open interest in the contract fell 0.8% to 10.90 mln, according to provisional data.
Going forward, analysts expect profit-booking to continue at higher levels due to concern over high valuations. “Other than global headwinds, higher domestic index valuations after the recent upsurge is making investors nervous, which may lead to some more profit-taking in the near term,” said Chouhan.
–Nifty 50 Sep closed at 20170.00, down 79.60 points; 36.70-point premium to spot index
–Nifty 50 Oct closed at 20280.00, down 72.35 points; 146.70-point premium to spot index
–Nifty 50 Nov closed at 20387.00, down 75.10 points; 253.70-point premium to spot index
State Bank of India, HDFC Bank, Reliance Industries, Mahindra & Mahindra, Titan Company, Tata Motors, Bajaj Auto, Punjab National Bank, Infosys, and ICICI Bank were among the most actively traded underlying stocks. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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