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Informist, Friday, May 8, 2026

 

By Gopika Balasubramanium

 

MUMBAI – Traders added short positions in the options chain of the Nifty 50 on Friday, dulling the prospects of a sharp rise in the index next week. Traders sold call options across the board, likely betting on a fall in the index, alongside buying put contracts at in-the-money strike prices. Throughout the week, activity in the options chain showed that traders were indecisive and uncertain about the direction the index will move in. Traders changed positions aggressively through out the weak, so as to hedge against the uncertainty about end of West Asia war as well as the start of transit through Strait of Hormuz. 

 

"The option chain data points to aggressive short build-up and the unwinding of existing long positions," Bhavya Shah, technical and derivatives analyst at StoxBox, said. Friday's "price action" was dominated by call writers, as pointed by the sharp decline in premiums on the call side, Shah said. "The activity on the put side further confirms the lack of long bets," Shah said, adding that if traders were going long, there would have been "heavy" put writing at higher strikes.

 

Friday, the Nifty 50 closed at 24176.15 points, down 150.50 points or 0.6%. While the index remained in a thin range, it closed higher for the second week in a row, but logged gains of just 180 points during the week. The index is expected to see strong support at 24000 points next week and the upside is seen capped near 24400-24500 points, Shah said.

 

Friday, traders wrote out-of-the-money contracts expiring next week, with premiums on 24200, 24250, and 24300 strike prices declining over 43-49%. At 24200 call, traders cut their positions aggressively and sold around 5 million contracts. Traders have built short positions at far out-of-the-money call contracts at 25200-25600 strike prices and the premiums on these prices fell 37-60%. The highest addition of open interest was at 24200 call and the total contracts were 7.46 million. Meanwhile, the concentration of open interest was maximum at 25500.  

 

On the put side, traders wrote contracts across far out-of-the-money contracts but bought in-the-money options, suggesting a bearish sentiment in the market. However, premiums at strike prices such as 23500 and 23000 were meagre. Traders bought in-the-money puts at strikes such as 24200-24300, with premiums rising around 36%. Traders also bought 24150 put and its premiums rose over 35%. The highest addition was at 23500 put and the maximum concentration of open interest was at the 24200 put.

 

--Nifty 50 May closed at 24228.70, down 154.10 points; 52.55-point premium to the spot index

--Nifty 50 June closed at 24343.00, down 148.70 points; 166.85-point premium to the spot index

--Nifty 50 July closed at 24475.00, down 145.30 points; 298.85-point premium to the spot index

 

State Bank of India, Titan Co., BSE, HDFC Bank, Britannia Industries, and KEI Industries were the most actively traded underlying stocks Friday.  End

 

Edited by Tanima Banerjee

 

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