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Informist, Tuesday, Jul. 21, 2026         

 

By Eshitva Prakash

 

MUMBAI – Traders continued to sell call options across strike prices in the Nifty 50 options chain and also wrote deep out-of-money put contracts. With implied volatility on strike prices with the highest open interest hovering around the India VIX levels, technical analysts do not see chances of sharp movements in the market.  

 

Analysts expect range-bound movement in the Nifty 50 to continue going forward. Traders purchased out-of-the-money put options for up to the 23800 strike price, a key support level for the headline index, which has been in a consolidation phase for a couple of weeks. Most new contracts were bought and sold at strike prices close to the spot level, reinforcing resistance and support levels around spot levels. While some at-the-money and out-of-the-money put contracts were purchased, a part of this buying was likely to benefit from relatively higher vega levels, tracking the Nifty 50's decline.

 

The Nifty 50 closed at 24187.70 points, down 50.80 points or 0.2%. The advance-to-decline ratio was slightly higher than one and the put-call ratio fell below one. Market participants await earnings of remaining Nifty 50 companies, with many slated for release later this week. Quick-commerce company Eternal, pharmaceutical giant Dr. Reddy's Laboratories, and fast-moving consumer goods player Nestle India will release their earnings Wednesday. 

 

Market sentiment has improved slightly after media reports said mediators are trying to bring the US and Iran back to the negotiation table. This has somewhat limited the rally in Brent crude oil. However, the September crude oil futures contract was still at elevated levels, at almost $90 per barrel on the Intercontinental Exchange, after the US and Iran continued to trade blows. "This positional sideways movement will continue," Vipin Kumar, assistant vice president of Globe Capital Markets, said. The analyst sees strong support for the Nifty 50 at 23800 points and immediate support at 24000 points. 

 

Traders sold call options across 24200–25000 levels, pushing down premiums on these contracts by 30–40%. Some traders also purchased expensive deep out-of-the-money contracts up to 26000 levels, but the volumes on these contracts were quite thin. Some traders unwound their long positions by purchasing deep-in-the-money put contracts. However, the highest put buying was seen around 24000–24100 strike prices, with premiums on these contracts almost doubling. But beyond this point, other put contracts were sold, indicating that traders expect a limited downside for the Nifty 50 from current levels. With 24200 put and call contracts having the highest open interest, the Nifty 50 is expected to move in a range. 

 

Traders sold put contracts across strike prices of Eternal's derivative contract. They also bought call contracts for up to INR 320 strike prices. The maximum call contracts were purchased at the INR 300 strike price, which is a near 5% premium from Eternal's current market price. Eternal is expected to report a consolidated net profit of a little over INR 3 billion and revenues of over INR 197 billion for the June quarter, according to the average of estimates from brokerages. Its projected performance in the June quarter is not comparable to the year-ago period due to a change in business model in its quick-commerce grocery deliveries.

 

The options data on Dr. Reddy's reflects expectations of a weak June quarter for the company. The company is expected to report a consolidated net profit of INR 7.8 billion for the June quarter, down nearly 45% from the year-ago quarter. Net sales are estimated at INR 82.8 billion, down over 3% on year. Traders sold call contracts across INR 1,220-1,300 strike prices and purchased out-of-the-money put contracts. The highest open interest addition on the put side was at INR 1,190, just over 1% lower from the current market price.

 

Analysts expect Nestle to report a net profit of INR 7.71 billion for the June quarter, up 17% on year. Its revenue is seen rising over 18% on year to INR 60.15 billion. Traders' opinion was, however, split on the company's stock. Several call options were bought for strike prices up to INR 1,500. Meanwhile, put options at INR 1,410 strike prices were also purchased. Some traders covered their shorts, while some others unwound their long positions. 

 

--Nifty 50 July closed at 24185.00, down 74.50 points; 2.70-point discount to the spot index

--Nifty 50 August closed at 24275.00, down 77.50 points; 87.30-point premium to the spot index

--Nifty 50 September closed at 24421.00, down 66.80 points; 233.30-point premium to the spot index

 

HDFC Bank, Infosys, ICICI Bank, Reliance Industries, One 97 Communications, Axis Bank, Bajaj Auto, State Bank of India, TVS Motor Co., and Dixon Technologies (India) were the most actively traded underlying stocks Tuesday.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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