Equity Futures: Traders sell calls below 21600 as Nifty 50 declines

Informist, Tuesday, Jan 30, 2024

By Anshul Choudhary

MUMBAI – Traders sold call options above 21600 strike price after the Nifty 50 failed to maintain its gains accumulated Monday and fell below this level. Even after today’s decline, analysts expect an upside is possible Wednesday, with significant open interest still present at 21700-21800 calls, which may act as resistance.

“We saw some selling on the call side today,” Jigar Patel, technical analyst at Anand Rathi Share and Stock Brokers said. He expects sideways movement in the Nifty 50 index for two-three weeks as most of the positive and negative events have been priced in. Other analysts spoke on similar lines, who also said that they are not expecting any major move in the Nifty 50 due to the Interim Budget, scheduled Thursday.

On the call side, premiums fell across strike prices. Premiums at 21600 strike price fell 157 rupees to 119 rupees, those at 21700 fell 135 rupees to 77 rupees, and those at 21800 were down 107 rupees to 51 rupees. The highest open interest was added at 21700 calls, which saw the addition of over 4 mln contracts.

The contracts on the put side witnessed some action on the far side, an analyst with Axis Securities. The highest open interest was added at 20500-20700 levels, over 700 points below the spot index. Premiums rose at 21250 puts, rising over 12 rupees to 45 rupees. The 21250 level is being seen as a possibility if the index fails to cross the 21700-21800 resistance.

Shares of Tata Motors were among the top gainers today, touching an intraday high of 885.95 rupees, over 5% higher than Monday’s close. Later, the stock came off highs to end the session at 858.85 rupees. Derivatives data does not suggest any more upside. The highest open interest for the contract was at 850 strike price, which is lower than today’s close.

–Nifty 50 Feb closed at 21625.05, down 230.20 points; 102.95-point premium to spot index

–Nifty 50 Mar closed at 21776, down 216.20 points; 253.90-point premium to spot index

–Nifty 50 Apr closed at 21900.55, down 225.20 points; 378.45-point premium to spot index

Tata Motors, Bajaj Finance, Reliance Industries, HDFC Bank, State Bank of India, and ITC, were the most-actively traded underlying stocks. End

Edited by Vidhi Verma

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