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Informist, Tuesday, May 20, 2025

By Anshul Choudhary

MUMBAI – Options traders reduced their long positions on the Nifty 50 after the index Tuesday fell below its near-term support level. Poor earnings growth in the March quarter and concerns of a global slowdown in the face of US tariffs have led to investors selling for profit after last week's sharp rise.

The Nifty 50 ended lower for the third straight session, falling 1.5% during this period. Tuesday, it closed over 1% lower at 24683.90 points. This pushed traders to sell call options across the board. For options expiring Thursday, the highest addition of open interest was at 24800-25000 calls. These levels are expected to act as the resistance for the Nifty 50.

A fall in the spot market also pushed traders to buy in-the-money and at-the-money put options, indicating expectations of more profit sales by investors. The highest addition of open interest was seen at 24500 puts and this level is likely to act as the immediate support for the index.

While the Nifty 50 may fall or stay in a range in the coming days, options data show the index is expected to rise soon. Traders continue to sell out-of-the-money put options, suggesting a hope that the fall in the market will be limited.

The May futures contract of the Nifty 50 closed at a premium of 98.10 points to the spot index. Open interest in the contract rose over 3% to 12.16 million, according to provisional data. 

--Nifty 50 May closed at 24782.00, down 194.40 points; 98.10-point premium to the spot index

--Nifty 50 Jun closed at 24883.00, down 210.90 points; 199.10-point premium to the spot index

--Nifty 50 Jul closed at 25035.00, down 197.00 points; 351.10-point premium to the spot index

Bharat Electronics, DLF, HDFC Bank, ICICI Bank, Hindustan Aeronautics, Reliance Industries, Dixon Technologies, Hindalco Industries, BSE, State Bank of India, RBL Bank, Tata Steel, Infosys, and Tata Motors were the most active underlying stocks Tuesday.  End

Edited by Rajeev Pai

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