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Informist, Wednesday, Oct. 7, 2026

 

By Eshitva Prakash

 

MUMBAI – Traders added to short positions in the options chain of the Nifty 50 index after a 25-basis-point rate hike and a hawkish change in stance by the Reserve Bank of India. Premiums on put contracts rose sharply and traders cut exposure to positive delta contracts. However, significant selling around the Nifty 50 spot level implies that the headline index likely faces limited downside.  

 

Premiums on out-of-the-money put contracts across 22300-22600 strike prices rose 40–50%. Further out-of-the-money puts were also purchased for contracts, albeit at smaller premiums. Premiums across 22300-22000 strike prices rose 10-30%. Open interest positions across these strike prices also rose sharply, with 3.5 million contracts being added to the 22600 strike price. This level will act as immediate support for the Nifty 50, analysts said.  

 

Further out-of-the-money put contracts, marked for expiry later than Tuesday also became more expensive. Premiums on the 21500-22000 strike prices rose as much as 30%. Premiums on the 22000 put contract--which had the highest number of open contracts among out-of-the-money put options expiring Oct. 27--were up 30%. India VIX--the market's fear gauge--rose over 2% to 13.89 points, making option contracts more expensive across the board. 

 

On the other side of the options chain, traders sold call options across strike prices, resulting in an up to 60?cline in premiums across 22800–23000 strikes. Deep-out-of-the-money call contracts across 23100-23500 strike prices were also sold across expiration dates. The highest call base at 23000 and 23800 strike prices, followed by 23500 strike prices, indicates that there are multiple hurdles in the way of a recovery in the Nifty 50. 

 

Wednesday, the Nifty 50 ended at 22603.05 points, down 0.8% from Tuesday. Kotak Mahindra Bank, BSE, and Bharti Airtel were the top gainers and ended 1-2% higher. Shares of some financial services companies and banks ended higher after the RBI tightened monetary policy. However, less than a tenth of Nifty 50 stocks ended higher as the central bank's hawkish remarks and concerns about high inflation in the future sent stocks tumbling. Metal and automobile companies were among the worst hit stocks.   

 

The Reserve Bank of India hiked its repo rate by 25 basis points and changed its stance from 'neutral' to 'calibrated tightening', while raising growth and inflation forecasts. The central bank also said that inflation is not deeply embedded, and the stance is more about mild hikes. Some analysts expect a 75-100 bps rate hike cycle in financial year 2026-27 (Apr-Mar), while others expect a shallower hiking cycle.

 

--Nifty 50 October closed at 22618.40, down 177.00 points; 15.35-point premium to the spot index

--Nifty 50 November closed at 22729.00, down 162.40 points; 125.95-point premium to the spot index

--Nifty 50 December closed at 22866.90, down 155.70 points; 263.85-point premium to the spot index

 

Bharti Airtel, ICICI Bank, HDFC Bank, BSE, Kotak Mahindra Bank, Axis Bank, Titan Co., One 97 Communications, State Bank of India, Reliance Industries, and Bajaj Finance were the most actively traded underlying stocks Wednesday.  End

 

US$1 = INR 96.78

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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