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Informist, Wednesday, Jul. 22, 2026

 

By Eshitva Prakash

 

MUMBAI – Traders aggressively sold call options across the options chain of the Nifty 50 derivatives amid a surge in crude oil prices. After an intraday fall in the headline index, traders took more short positions and carried forward their deep-out-of-the-money put contracts indicating a negative bias in the market. Some analysts said the Nifty 50 is likely to consolidate in the near term, but if the index breaches its immediate support levels, it could see a sharper correction.

 

The US bombed Iran for the eleventh consecutive night Tuesday, in response to which Tehran launched several attacks on Bahrain, Kuwait, and Jordan. Additionally, at least two oil tankers headed towards the Bab al-Mandeb chokepoint in the Red Sea turned around after Houthi militants threatened to blockade Saudi Arabia. Multiple other vessels headed towards the crossing, which handled 12% of global oil flows before the war, also paused or turned around in the Gulf of Aden, Dow Jones Newswires reported. Ukrainian attacks on Russian ships have disrupted another supply route for crude oil, the news agency added.

 

The Nifty 50 closed 0.8% lower at 23996.25 points, tracking a sharp rise in crude oil prices. The September futures contract of Brent Crude oil rose over 3% to $93.80 per barrel on the Intercontinental Exchange. The put-call ratio fell to 0.7, approaching oversold levels, and the advance-to-decline ratio worsened from Tuesday to 0.7. Stocks of some companies such as Bajaj Auto and Nestle India were driven higher by strong June quarter results. But pharmaceutical majors were a drag on the 50-stock index after US President Donald Trump announced a fresh wave of tariffs on imports of generic drugs.

 

Traders wrote call contracts across the derivative chain of the Nifty 50. Some also unwound their long positions. At-the-money and out-of-the-money call contracts were sold heavily, with premiums across 24000–24300 strike prices declining 44-54%. On the put side, traders purchased deep out-of-the-money contracts, resulting in an increase of around 80% for premiums across 23500-23800 strike prices. Call contracts at 24100 and 24200 strike prices had an implied volatility of a little over 11.

 

Options data on the Nifty 50 showed the most put options were purchased at the 24000 strike price intraday. Analysts said a close below this level would drag the Nifty 50 down to its strong support level at 23800 strike price. The next highest open interest on the put side was at 23000 and 23500 strike prices. "The buying interest at 23000 levels is primarily due to hedges being built for downside protection... traders may have purchased (put options at 23000 strike price) after intraday weakness at cheap premiums to get margin benefit," Jatin Gedia, vice-president of technical research at Teji Mandi Investment Technologies, said. He added that he does not expect the Nifty 50 to fall below 23800 points and sees the July contract of the Nifty 50 expiring in the 23900–24400 range.

 

"Today, we have seen a gradual addition at 23000 PE (put), traders are carrying over 23000 PE (put) positions from the previous sessions," Vipin Kumar, assistant vice-president at Globe Capital Markets, said. The 23000 level is the previous swing low and will act as a strong support even in case of a drastic fall, so it becomes a preferred choice for conservative writers, he explained. "Indices are still trading in a range with negative bias having immediate support around the 24000-23800 range," he added.

Traders are betting on a sharp fall in shares of InterGlobe Aviation, which will release its earnings Thursday. Traders sold out-of-the-money call contracts and purchased options with relatively higher vega. Premiums across put contracts of INR 4,800-INR 5,100 strike prices tripled and quadrupled. Brokerages expect the company to report a net profit of INR 12.30 billion for the June quarter, down 43% on year. Its top line is estimated to rise 18% on year to INR 242.64 billion.

 

Pharmaceutical major Cipla will also release its June quarter earnings Thursday. Traders unwound long positions and bought put contracts across the derivatives chain of Cipla's stock. However, the negative sentiment may be limited as put buying was prevalent on cheap contracts. Premium at the INR 1,400 strike price, which is just over 1% lower than the current market price, rose almost 50%. The Mumbai-headquartered company's consolidated net profit is expected to fall over 34% on year to INR 8.52 billion for the June quarter. Its revenue for the reporting quarter is expected to rise marginally to INR 71.04 billion.

 

Traders also unwound their long positions on derivative contracts of Infosys ahead of the information technology major's June quarter earnings. They sold out-of-the-money call contracts and purchased in-the-money and out-of-the-money put contracts across different strike prices. The premium for the put contract at INR 1,000 strike price almost doubled to INR 9, implying volatility in the contract was up over 53%. Infosys's consolidated net profit for the June quarter is expected to decline over 7% sequentially to INR 78.67 billion. The large-cap firm's consolidated revenue for the reporting quarter is likely to rise over 4% sequentially and nearly 15% on year to INR 484.45 billion.

 

--Nifty 50 July closed at 23982.00, down 198.60 points; 14.25-point discount to the spot index

--Nifty 50 August closed at 24077.10, down 198.10 points; 80.85-point premium to the spot index

--Nifty 50 September closed at 24230.00, down 189.10 points; 233.75-point premium to the spot index

 

HDFC Bank, Bandhan Bank, Infosys, Bajaj Auto, Reliance Industries, ICICI Bank, JSW Steel, Nestle India, State Bank of India, and Adani Green Energy were the most actively traded underlying stocks Wednesday.  End

 

US$1 = INR 96.56

 

Edited by Rajeev Pai

 

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