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Informist, Friday, Sep 20, 2024

By Anshul Choudhary

MUMBAI – Traders had to adjust to extreme volatility in the market with the Nifty 50 moving in a wide range of over 400 points. Traders flocked to buy call options, whose premiums surged, but these also came off highs briefly when investors booked profits.

Indices tracked overnight gains in the US, which rose as concerns about a slowdown in the US abated after labour market data. US initial jobless claims for the week ended Saturday came in at 219,000, lower than the 229,000 claims expected in a Dow Jones poll. Further, the rate cut by the US Federal Reserve on Wednesday, along with indications that it would cut rates by 50 bps more by the end of this year, helped benchmark indices touch record highs. The Nifty 50 was up 1.5% to end the session at 25790.95 points--its highest closing level.

Traders bought call options, but premiums were volatile. At one point, premiums for out-of-the-money strike prices surged 100-400%, before coming off highs. The maximum open interest addition was seen at 29000 call options, followed by 25700 points. Analysts were divided; some say the index may move higher to 26000 points, while there were others who expect slight profit booking next week.

For put options expiring this month, premiums declined for most contracts. However, some traders bought deep in-the-money puts contracts in anticipation of a fall due to profit booking next week. The maximum open interest addition was seen at 25700 put options, followed by 25600 puts. Analysts expect the Nifty 50 to find support around 25500 points.

The September futures contract of the Nifty 50 closed at a marginal discount of 0.75 points to the spot index. Open interest in the contract rose 11.5% to 14.52 mln, according to provisional data. 

--Nifty 50 Sep closed at 25790.20, up 301.10 points; 0.75-point discount to spot index

--Nifty 50 Oct closed at 25900.00, up 288.25 points; 109.05-point premium to spot index

--Nifty 50 Nov closed at 25999.00; up 276.60 points; 208.05-point premium to spot index

HDFC Bank, ICICI Bank, Reliance Industries, Mahindra & Mahindra, Infosys, Kotak Mahindra Bank, Bharti Airtel, State Bank of India, Larsen & Toubro, and Axis Bank were the most-actively traded contracts.  End

Edited by Manisha Baxla

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