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Informist, Monday, Mar. 23, 2026

 

By Simran Rede

 

MUMBAI – With the recent escalation of the war in West Asia and the Nifty 50 index falling 2.6% on Monday, traders took more cautious positions in the index's derivatives contracts. They built fresh short positions on the call side of the Nifty 50 options chain, while buying put contracts at multiple strikes. Market participants see the Nifty 50 testing 22000 points this week, given the widespread buying in the index's weekly put options and the addition of short positions on the call side.

 

Moreover, the expiry of the weekly Nifty 50 derivatives contract is expected to be sharply volatile as concerns over an escalation in the Iran conflict worsen sentiment and investors try to hedge their losses. US President Donald Trump's ultimatum to Tehran to reopen the Strait of Hormuz ends after market hours Tuesday, which is likely to add pressure on investor sentiment.

 

If Iran does not agree to the US, Trump said this will lead to potential strikes on its power infrastructure. In its response, Iran has warned it would retaliate by targeting energy and water assets across the Gulf region. "The Strait of Hormuz is open to all except those who violate our soil," Iranian President Masoud Pezeshkian said Sunday.

 

The fear gauge India VIX ended up 17.2% at 26.73, its highest level since June 2024. The indicator closed up for the third straight session Monday. The Nifty 50 index settled at 22512.65, down 601.85 points or 2.6% and the BSE Sensex settled at 72696.39, down 1836.57 points or 2.5%. The 50-stock index ended at an 11-month closing low and the 30-stock index closed at its lowest level since June 2024. 

 

Deep out-of-the-money call contracts of the Nifty 50 declined 80–90% on the strikes, with open interest rising 4 million-6 million. On the other hand, deep out-of-the-money put contracts of the index soared 100-200% with the open interest rising to as much as 3 million. 

 

While the largest increases in open interest were in the 23000-point call and 21500-point put options, the largest concentration of open interest was at the 24000-point call strike and the 21000-point put contract. Traders also closed previously bought in-the-money put contracts, implying a further bearish tone for the index. The premiums on 23100-24000 strikes rose by around 100%, while open interest fell to nearly 2 million.

 

With the current contract expiring Tuesday, traders also wrote out-of-the-money call contracts of the Nifty 50 expiring Mar. 30. The put contracts expiring next week showed similar movement as contracts expiring Tuesday, with the premiums rising 100-200%. The monthly Nifty 50 derivative contracts will expire on Mar. 30 as stock exchanges in India will be closed on Mar. 31 for Mahavir Jayanti.

 

Investors also added short positions in the Nifty 50 futures contracts for March, April, and May. The March futures contract fell 2.8% to 22497.80 with its open interest rising 2.7% to 17.63 million. 

 

--Nifty 50 March closed at 22497.80, down 642.70 points; 14.85-point discount to the spot index

--Nifty 50 April closed at 22625.10, down 649.20 points; 112.45-point premium to the spot index

--Nifty 50 May closed at 22770.00, down 652.10 points; 257.35-point premium to the spot index

 

HDFC Bank, Reliance Industries, Infosys, ICICI Bank, State Bank of India, Tata Consultancy Services, Multi Commodity Exchange of India, Aurobindo Pharma, Larsen & Toubro, Vedanta, Hindalco Industries, Shriram Finance, InterGlobe Aviation, Bajaj Finance, Axis Bank, Vodafone Idea, Bharti Airtel, and Dixon Technologies (India) were the most actively traded underlying stocks Monday.  End

 

Edited by Saji George Titus

 

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