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Informist, Monday, Mar. 2, 2026

 

By Gopika Balasubramanium

 

MUMBAI – Traders added short positions in the options chain of Nifty 50 due to rising tensions in West Asia, as the US and Israel attacked Iran on Saturday and leading to a spike in crude oil prices. Reacting to the developments, indices fell across Asian markets, with those in Hong Kong and Indonesia falling the most. Most derivative analysts expect the Nifty 50 to stay below 25000 points and see volatility in domestic equities in the upcoming sessions. The domestic market is closed Tuesday on account of Holi.

 

On Saturday, Israel and the US carried out strikes against Iran and the latter retaliated by targeting US military bases in the United Arab Emirates, Kuwait, and Bahrain. The strikes on Iran led to the demise of its Supreme Leader, Ayatollah Ali Hosseini Khamenei.

 

On Monday, the Nifty 50 closed at 24865.70 points, down 312.95 points or 1.2%. The 50-stock index fell to an intraday low of 24603.50 points, slightly above the low it had hit on Budget Day when traders sold aggressively after the finance minister proposed a hike in securities transaction tax on futures and options transactions. However, the Nifty 50 recouped some losses towards the end of the session. The volatility in the index was also due to expiry of weekly options contracts on Monday instead of Tuesday due to the market holiday.

 

The options chain of the Nifty 50's current expiry indicates a severe deterioration in market breadth and sentiment, Bhavya Shah, derivatives and technical analyst at StoxBox, said. Many market participants are heavily short at higher levels, essentially building a formidable resistance that will cap any near-term relief rallies, Shah said. "We are seeing significant unwinding of put open interest at the 25000 and 25100 strikes," Shah added.

 

"When put writers close their positions in a falling market, it indicates a distinct lack of confidence in the market's ability to hold higher levels," Shah said, adding that the base actively shifted downward as participants retreat to deeper out-of-the-money strikes for safety. "Participants have rapidly shifted from a buy-the-dip mentality to a sell-the-rally strategy.

 

Options chain showed that traders added most number of short positions at 24900 call, indicating that the Nifty 50 would face strong resistance at this level in the spot market in the upcoming sessions. Further, short positions were added at even higher out-of-the-money call options of 25200-25300 strikes. The maximum concentration of open interest was at 24900 call and maximum addition of open interest was at 25000 call.

 

Meanwhile, traders bought put options at deep out-of-the-money put contracts, indicating the possibilities of further fall. The maximum concentration of open interest was at 24500 put so was the maximum addition of open interest on Monday.

 

"The geopolitical premium has spiked volatility, and until we see a stabilization in the Middle East and a decisive short-covering trigger above the 25000 points. The military attack on Iran has also led to a jump in the price of crude oil due to concerns of logistical disruption after the closure of the Strait of Hormuz. Nearly 20% of global oil and over 40% of India's crude imports transit through Strait of Hormuz," JM Financial said in a report. 

--Nifty 50 March closed at 24988.00, down 350.60 points; 122.30-point premium to the spot index

--Nifty 50 April closed at 25141.80, down 357.20 points; 276.10-point premium to the spot index

--Nifty 50 May closed at 25235.00, down 363.20 points; 369.30-point premium to the spot index

 

HDFC Bank, Reliance Industries, Larsen & Toubro, State Bank of India, InterGlobe Aviation, ICICI Bank, Dixon Technologies (India), Multi Commodity Exchange of India, Bharat Electronics, Oil and Natural Gas Corp., Infosys, Bharti Airtel, and Eternal were the most actively traded underlying stocks Monday.  End

 

Edited by Ashish Shirke

 

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