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Bank Nifty index had ended in the negative zone on Wednesday on news that the Modi Government will face a no-confidence motion by TDP and other Opposition parties on Friday. Bank Nifty index had ended lower by 127.20 points at 26880.90, while Bank Nifty July futures contract closed at 26,967.90.
Active Call Options of July 26 expiry
Among the call option chain, the In-The-Money Bank Nifty Call 26,800 option was the actively traded contract on Wednesday. The option price closed down by 23 per cent at Rs 300. Open interest in the contract too fell 24.16 per cent which confirms that traders have cut their open positions in the contract.
The implied volatility was comparatively higher at 14.10 per cent. It is an indication that the underlying Bank Nifty will trade in a subdued manner and is likely to fall to 26,800 levels in the short term. However, in case of an upside, the underlying Bank Nifty may face strong resistance around 27,100 levels.
Bank Nifty Call 27,000 option contract is currently an Out-Of-the-Money option that traded active on Wednesday. The option price had ended down 25.68 per cent at Rs 192. However, OI rose 9.70 per cent with the IV at 13.90 per cent.
Traders have taken fresh long positions in this contract with the option price turning cheaper. Hence, the underlying Bank Nifty may encounter resistance around 27,100-27,200 levels in case of any volatility before the expiry.
Active Put Options of July 26 expiry
On the put option chain, the In-The-Money Bank Nifty Put 27,000 option contract saw maximum addition of fresh positions. OI jumped by 33.90 per cent. The put option price had ended up 29.75 per cent at Rs 220.
The implied volatility was relatively lower at 11.85 per cent. This confirms that the underlying Bank Nifty is likely to get support around 26,800 levels in the short term.
The Out-Of-The-Money Bank Nifty Put 26,800 contract saw good buying interest. This put option price gained 29.70 per cent and closed at Rs 138, while OI rose sharply by 87.75 per cent.
The implied volatility of the option price was at 12.65 per cent indicating that the underlying is likely to get support around 26,700-26,800 levels.
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