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Equity Futures: Option chain shows range-bound movement for Nifty 50

Informist, Monday, Jul 31, 2023


By Padmini Dhruvaraj


MUMBAI – The options chain indicates that the Nifty 50 is stuck in a range, with 19900 acting as a hurdle and 19600 providing support, analysts said.


Call option writing was highest at 19800 and 19900 strikes today, said Ratnesh Goyal, senior technical and derivatives analyst at Arihant Capital Markets. Meanwhile, put writers were active at 19600 and 19700 strikes, indicating that the Nifty 50 will trade between 19600 and 19900, he added.


Meanwhile, the open interest and premiums of call options between 19650 and 19850 strike prices, expiring on Friday, rose after the Nifty 50 shrugged off the weakness displayed in the morning and entered green territory.


The open interest on the call side was highest at the 19800 strike price with 8.51 mln open positions. The 19950 strike price saw the highest net change in open interest of 1.63 mln positions.


Some aggressive call option selling was seen at the 20000, 20050, and 20150 strikes. While the premiums of the strike prices declined by 20-40%, they had significant net open interest addition.


On the put front, premiums of most contracts expiring on Friday fell 30-60%. The net change in open interest was highest at the 19700 strike, but the premiums fell 55% to 50.45 rupees. Open interest was the highest at 19600 strike.


In the spot market, the Nifty 50 snapped its two-day losing streak, led by gains in information technology stocks. The 50-stock index ended 0.6% higher at 19753.80 points.


The index gained for the fourth straight month, ending July with a gain of 2.9%. “Going ahead, we expect the market to continue its north-bound journey with phases of consolidation,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.


The August futures contract of the Nifty 50 closed at a premium of 83.2 points to the spot index today. Open interest in the contract fell 0.44% to 11.31 mln, according to provisional data.


–Nifty 50 Aug closed at 19837.00, up 85.20 points; 83.20-point premium to spot index

–Nifty 50 Sep closed at 19960.00, up 78.60 points; 206.20-point premium to spot index

–Nifty 50 Oct closed at 20060, up 96.00 points; 306.20-point premium to spot index


Maruti Suzuki, Reliance Industries, Tata Consultancy Services, NTPC, Adani Enterprises, ICICI Bank, NMDC, Adani Ports and Special Economic Zone, HDFC Bank, ACC, and Kotak Mahindra Bank were among the most actively traded underlying stocks.  End


Edited by Rajeev Pai


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Source: Cogencis

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