Equity Futures: Call premiums on 21250-21600 up as Nifty 50 rises

Equity Futures: Call premiums on 21250-21600 up as Nifty 50 rises

Informist, Wednesday, Jan 24, 2024


By Padmini Dhruvaraj


MUMBAI – Premiums on 21250-21600 strike prices of the call options expiring Thursday rose today as the Nifty 50 closed higher today after falling for two days. However, analysts said the market sentiment is still slightly negative as call writing was seen at 21700-22000 strike prices.


The benchmark index opened slightly lower and turned volatile, mirroring the movement in the Nifty Bank index. But gains in shares of Reliance Industries, information technology and fast-moving consumer goods companies helped the 50-stock index end 1% higher at 21453.95 points.


"Domestic equities bounced back strongly today after yesterday's (Tuesday) sharp sell-off. Sentiments turned buoyant following positive global cues, impressive quarterly results and better than expected January PMI data," Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services, said.


The open interest in 21450 strike price of the call options was the highest with 1.76 mln new positions being added, while the premium rose 183.6% to 98 rupees. Moreover, some aggressive call selling was seen at 21700, 21800, and 22000 strike prices.


"The 21400PE (put options) saw the highest addition of open interest indicating immediate support going forward," Avdhut Bagkar, technical and derivatives analyst at StoxBox.


On the put side, premiums across strike prices declined. Open interest in the 21400 strike price was the highest with 5.31 mln new additions. However, the premium on the contract declined 84.7% to 38.8 rupees. Further, aggressive put selling was seen at 21100, 21000, and 20700 strike prices.


The rise of the Nifty 50 was capped by a decline in some banking stocks such as ICICI Bank and Axis Bank. The Nifty Bank index closed 67.35 points or 0.2% higher at 45082.40 points. "The banking index tested its long term moving average on Wednesday (today) so we can't rule out some consolidation," Ajit Mishra, senior vice president of technical research at Religare Broking, said in a note.


The 47000 strike price of the Nifty Bank's call options had the most open interest addition, while the 44000 strike price on the put options attracted the highest open interest build-up.


The January futures contract of the Nifty 50 closed at a premium of 34.95 points to the spot index. Open interest in the contract rose 10.1% to 8.69 mln, according to provisional data.


On Thursday, the Nifty 50 might experience some selling pressure due to the expiry of monthly derivative contracts, analysts said. The index is expected to find support at 21100 points and face resistance at 21600 points.


"Given monthly F&O (futures and options) expiry and the long weekend ahead, traders would stay light, especially in the absence of any major positive trigger," said Khemka.


--Nifty 50 Jan closed at 21488.90, up 294.65 points; 34.95-point premium to spot index

--Nifty 50 Feb closed at 21628.00, up 275.70 points; 174.05-point premium to spot index

--Nifty 50 Mar closed at 21773.95, up 275.30 points; 320.00-point premium to spot index


Reliance Industries, HDFC Bank, Axis Bank, Adani Enterprises, State Bank of India, ICICI Bank, Tech Mahindra, Bajaj Auto, and Hero MotoCorp were the most actively traded underlying stocks.  End


Edited by Ashish Shirke


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