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Informist, Thursday, Jul. 23, 2026

 

By Eshitva Prakash

 

MUMBAI – Traders continued to sell call options across strike prices of the Nifty 50 options chain and also unwound their long positions on the headline index. Fresh short positions were added slightly below the Nifty 50's new support levels, but several further out-of-the-money put contracts were sold, indicating limited downside from the lower end of Nifty 50's consolidation range. With a hefty open interest build-up at the new support level, analysts expect the Nifty 50 to move in a range.
 

Thursday, the Nifty 50 ended 0.5% lower at 23869.60 points, with automobile stocks leading gains among constituents of the index. Momentum in Bajaj Auto's shares continued after the company's strong June quarter results. Shares of SBI Life Insurance Co. and Tata Consumer Products also rose ahead of their earnings Friday, while Shriram Finance and NTPC ended lower ahead of their earnings. The put-call ratio for the current week's expiry is at 0.69, which indicates negative sentiments with a sell-on-rise trading approach as long as the spot index is trading below 24000 levels on a closing basis, Vipin Kumar, assistant vice president at Globe Capital Markets, said.

 

Throughout the day, traders sold out-of-the-money call options after the Nifty 50 fell decisively below its 24000 support level. Analysts said a fall to 23800 is likely, but the level will act as a strong support for the index, which has been consolidating at 23800-24200 for several sessions. 

 

Market participants are closely watching the June quarter earnings and the war in West Asia, as they look for further cues to make decisive directional bets, analysts said. Market sentiment remained weak due to the surge in crude oil prices after the US military carried out its 12th consecutive night of strikes on Iran Wednesday. While the US insisted the Strait of Hormuz remains open, traffic through the chokepoint has slowed down, pushing up global oil prices. At 1605 IST, the September futures contract of Brent crude oil traded nearly 5% higher at $98.72 per barrel. 

 

Traders wrote out-of-the-money put options across 23400-23600 strike prices, but they purchased put contracts closer to the spot level at 23700–23750 levels. Premiums on the 23800 put contract rose nearly 8% to INR 87.70. Premium on the 23700 put contract was up over 3% at INR 56.50. The highest open build-up on the put side was at 23000 and 23500 strike prices. Traders sold these contracts and also covered their short positions, with many choosing not to carry over the 23000 put option any further.           

 

Premiums on the 24000-strike price declined nearly 50%, while those on the 24,200 strike price, the Nifty 50's previous resistance level, fell 60%. Deep-out-of-the-money call contracts were sold aggressively, with premiums at the 25000 strike price declining 45%. The implied volatility at these levels does not indicate sharp movements in the market. 

 

Traders expect a decline in shares of Shriram Finance, but with open interest rising for put options close to spot levels, the downside will likely be limited. Traders unwound long positions, closing call contracts at the INR 1,050 strike price and sending premiums at the strike tumbling 47%. Additionally, they bought puts at the INR 1,000 strike price, and the premiums on the contract almost doubled from Wednesday. Shares of the company ended at INR 1,025.80 on the National Stock Exchange, down over 3% from Wednesday. 

Despite a rally in shares of Tata Consumer Products Thursday, traders bet that the stock is poised for a further rise. Call contracts at INR 1,120-INR 1,150 strike prices were in heavy demand. However, further out-of-the-money call contracts were sold. The company's consolidated top line is expected to rise nearly 12% on year to over INR 53 billion in the June quarter. Its bottom line is expected to rise nearly 23% on year, but decline 1.6% sequentially to INR 4.10 billion. The stock ended at INR 1,107.70 on the NSE, up 1.2% from Wednesday.

 

SBI Life Insurance will release its earnings Friday. After a sharp rally in the stock Thursday, traders have added fresh long positions, purchasing call contracts across INR 1,900-INR 1,980 strike prices. They also covered their short positions and aggressively sold put contracts. The stock ended at INR 1,853.50 on the NSE, up 2.6% from Wednesday.

 

Traders unwound their short positions on NTPC ahead of the company's earnings. They also bought fresh at-the-money and out-of-the-money puts, albeit at a cheap premium. The company is expected to report a year-on-year rise in both net profit and revenue for the June quarter, led by high power demand due to a delay in the arrival of the monsoon. Its net profit is projected to rise nearly 7% on year to over INR 51 billion. Its top line is expected to rise almost 12% on year to INR 476 billion.

 

--Nifty 50 July closed at 23886.00, down 102.40 points; 16.40-point discount to the spot index

--Nifty 50 August closed at 23950.00, down 129.70 points; 80.40-point premium to the spot index

--Nifty 50 September closed at 24091.50, down 138.80 points; 221.90-point premium to the spot index

 

HDFC Bank, Infosys, ICICI Bank, Tata Consultancy Services, Reliance Industries, Oracle Financial Services Software, Bharti Airtel, Eternal, TVS Motor Co., and Vodafone Idea were the most actively traded underlying stocks Thursday.  End

 

US$1 = INR 96.57

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

 

Edited by Saji George Titus

 

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