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Informist, Wednesday, Jul. 29, 2026

 

By Eshitva Prakash

 

MUMBAI – Traders continued to sell put options across strike prices on the options chain of the Nifty 50 after the headline index rose Wednesday, rebounding from a lacklustre monthly expiry session Tuesday. The put-call ratio for contracts expiring Tuesday suggests an in-range session for the 50-stock index in the near term, but call contract purchases across strikes show traders hope for a further rise. Sentiment around the bank stocks also improved, with traders covering their short positions on the Nifty Bank index and purchasing out-of-the-money call contracts.  

 

Wednesday, the Nifty 50 closed 1.1% higher from Tuesday at 24250.20 points. Traders purchased deep-out-of-the-money call options across 24300-24800 strike prices and premiums for these contracts rose 20–70%. Further deep out-of-the-money call contracts were also purchased, albeit at a smaller delta due to the low intrinsic value of these options. In-the-money contracts were also in demand, primarily as a hedging strategy and to cover short positions. Some traders also rolled call options up to a higher strike price, further indicating bullish momentum.

 

Traders exited short positions intraday and sold out-of-the-money put options relentlessly. Premiums across 23900–24200 strike prices fell 50–60%. Further out-of-the-money put options also came under selling pressure and some put writers rolled up contracts. Premiums across 23600–23800 strike prices were down 50–70%. Theta decay for long puts across strike prices were high.

 

An intraday rise in the Nifty Bank index forced traders to cover their short positions. They wrote put contracts across out-of-the-money contracts. However, near-the-money put contracts were still quite expensive, indicating that several traders are holding on to their short positions. A high theta decay at 57000 and 56000 put contracts which have the highest open interest signals high risk for traders. Premiums across 57000–56000 strike prices declined significantly and premiums of at-the-money call contracts rose sharply.

 

"Put writing was seen at multiple strikes along with some call addition at various strikes," Vipin Kumar, assistant vice-president of research at Globe Capital Market, said. "Maximum positions are at 25000 CE (call) closely followed by 24200 CE (call) and 24200 PE (put) implying immediate supports around 24100 spot levels and resistance around 24300-24350 spot levels," the analyst said. The put-call ratio for the current week expiry at 1.15 indicates sideways movement of the Nifty 50 with a slightly positive bias, he said.

 

Traders cut long positions on the options of Mahindra & Mahindra significantly before the automaker's June quarter results. Premiums on out-of-the-money put contracts rose sharply and call writers dominated the call side. Premiums across INR 3,300-3,500 strike prices declined 18–19% at comparable levels of implied volatility. Out-of-the-money put contracts had higher implied volatility and premiums across INR 3,000-INR 3,200 strike prices rose sharply. Analysts expect the company to report its weakest year-on-year profit growth in eight quarters for the June quarter despite strong growth in despatches because of a sharp spike in commodity costs. Its sales are expected to get a boost from improved realisations driven by recent price hikes. M&M's net profit for the June quarter is expected to rise a little over 4% on year to INR 35.96 billion. Its revenue is expected to rise more than 22% on year to INR 417.39 billion.

 

Bajaj Finance will also report its June quarter earnings Thursday. The options data on the company indicate that traders have taken opposing bets. However, higher premiums of out-of-the-money call contracts compared to put contracts with similar implied volatility shows bets are skewed in favour of the bulls. Premiums across INR 1,100–INR 1,080 call contracts rose sharply. Put contracts across INR 1,000-INR 980 strike prices were also in demand. The company is expected to report strong earnings growth for the June quarter, supported by healthy expansion in assets under management, sustained customer acquisition, and resilient loan demand across retail lending segments. However, increased funding costs could continue to weigh on the net interest margin. Analysts expect Bajaj Finance to report a net interest income of INR 126.73 billion, up 24% from a year earlier.

 

Traders are bullish on Tata Steel ahead of the company's June quarter results Thursday. Premiums on out-of-the-money call contracts rose sharply while out-of-the-money put contracts were sold relentlessly. Tata Steel's revenue for the June quarter is expected to mirror the delivery volumes data, which showed strong year-on-year growth in India volumes partly offset by declines in output from the Netherlands, the UK, and Thailand. The company is expected to report a consolidated net profit of INR 24.44 billion for the June quarter, up 10.6% on year. Excluding an outlier estimate of revenues, its top line is expected to rise nearly 10% on year to INR 582.89 billion.

 

--Nifty 50 August closed at 24303.00, up 204.20 points; 52.80-point premium to the spot index
--Nifty 50 September closed at 24418.60, up 181.80 points; 168.50-point premium to the spot index
--Nifty 50 October closed at 24567.30, up 216.20 points; 317.10-point premium to the spot index

 

Infosys, Asian Paints, KPIT Technologies, Hindustan Unilever, Tata Consultancy Services, Adani Ports and Special Economic Zone, Jio Financial Services, Reliance Industries, Larsen & Tourbro, and HDFC Bank were the most actively traded underlying stocks Wednesday.  End

 

Edited by Rajeev Pai

 

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