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Informist, Tuesday, Dec. 31, 2024

By Anshul Choudhary

MUMBAI – Options data show indecisiveness among traders and the Nifty 50 may move in a range till Thursday's expiry. Data showed bullish bets on the Nifty 50 increased after the index managed to recover from intraday lows, but bearish bets also remained and a fall to 23500 points, which it tested Tuesday, is still seen as a possibility.

"In the derivatives space, a balanced tug-of-war between call and put writers reflected market indecision as traders awaited a clear trigger," said Dhupesh Dhameja, derivatives analyst at SAMCO Securities, in a note. "Nearly equal additions in both call and put options created a constrained range of 23,500–24,000, reinforcing the stalemate between bulls and bears."

Analysts expect muted gains from here as there are concern about a prolonged earnings slowdown, outflows by foreign investors, and uncertainty around US President-elect Donald Trump's policies. Tuesday, the Nifty 50 closed at 23644.80 points, unchanged from Monday.

For the call options expiring Thursday, traders added long positions at in-the-money strike prices. However, they continue to sell out-of-the-money call options, particularly options above 23800 strike prices. The maximum open interest addition was seen at 24300-24500 strike prices, followed by 24700 calls. Dhameja said 24000 call options saw significant open interest addition and would remain a strong resistance for the index.

For put options, traders sold out-of-the-money strike prices, indicating hopes of a rise in the index. However, they also bought in-the-money put options as some expect the index could fall up to 23500 points and then extend its fall to 23250 points. Sentiment was largely weak as the Nifty 50 was down for the third straight month now, falling 8% during this period. Analysts expect the Nifty 50 to find immediate support at 23500 points.

The January futures contract of the Nifty 50 closed at a premium of 174.65 points to the spot index. Open interest in the contract rose 9.1% to 13.49 million, according to provisional data.

--Nifty 50 Jan closed at 23819.45, up 2.75 points

--Nifty 50 Feb closed at 23964.75, up 2.45 points; 319.95-point premium to spot index

--Nifty 50 Mar closed at 24106.50, down 9.50 points; 461.70-point premium to spot index

HDFC Bank, Kotak Mahindra Bank, ICICI Bank, Reliance Industries, Infosys, Lupin, State Bank of India, ITC, Axis Bank, Tata Consultancy Services, Dixon Technologies, Adani Enterprises, and Aurobindo Pharma were the most actively traded contracts.  End

Edited by Akul Nishant Akhoury

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