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Informist, Thursday, Aug. 6, 2026

 

By Eshitva Prakash

 

MUMBAI - Premiums on out-of-the-money BSE Sensex call options fell sharply only after the closing auction ended. In a departure from the usual pattern on weekly expiry day, premiums on these contracts remained elevated through most of the session, while buying also emerged in some out-of-the-money call contracts intraday. Analysts said caution among call writers and bets that the Sensex would spike after the closing auction led to the liquidation of many call positions.

 

Traders had bet that the closing auction would push the Sensex sharply higher from its 1515 IST levels and therefore held onto their contracts. However, premium decay accelerated sharply after the closing auction showed the Sensex had climbed 169 points from its 1515 IST level, which is sizeable, but nowhere near the bets placed by traders. Traders had hoped the closing auction session would result in a sharp rise similar to the one in the Nifty 50 index Tuesday when thin liquidity had pushed premiums sharply higher.

 

For most of the session, call writers were largely absent from Sensex options, resulting in marginal premium decay in call contracts despite the weekly expiry. Due to low selling interest, the bid-ask spread was elevated until the very last hour of trading, resulting in a sharp decline when call writers returned. Put writers, meanwhile, were active throughout the session. Some traders rolled their positions up to avoid uncertainty under the closing auction system, resulting in a sharp rise in premiums of out-of-the-money call contracts.

 

Looking ahead, traders expect the Nifty 50 to rise in the next week as premiums for long positions rose, while short positions came under selling pressure. However, these contracts have a low theta decay and a high extrinsic value. Premiums across 24700–25000 strike prices rose 12–20% and premiums across 24600-24200 strike prices declined 40–50%. 

 

A heavy open interest build-up around closing levels of the Nifty 50, particularly at the 24700 strike price, indicates that the headline index will likely find resistance near its closing level Thursday. "I think the Nifty 50 will move in the 24400-24800 range in the near-term," Rupak De, senior technical analyst at LKP Securities, said. 

 

State Bank of India will report its June quarter earnings Friday. Traders added long positions on the options chain of SBI before its earnings. Premiums on near-the-money call options rose significantly, accompanied by a fall in out-of-the-money put contracts. The premium on the INR 1,100 strike price more than doubled to INR 24. Steady credit growth, healthy business expansion, and stable asset quality will likely support the lender's growth. However, pressure on net interest margin due to elevated deposit costs and higher provisioning is likely to limit profit growth for the quarter. India's largest lender is expected to report net interest income of INR 455.91 billion, up around 3% sequentially. Net profit is estimated at INR 194.31 billion, reflecting a 1.3% sequential decline. 

 

Titan Co. will also report its earnings Friday. Robust growth in domestic jewellery sales, coupled with healthy sales of watches, eyewear, and other products, will likely help the company report strong earnings growth for the June quarter, brokerages said. They expect a jump of over 25% on year in its net profit for the June quarter to nearly INR 13 billion, while revenue is expected to rise nearly 38% on year to nearly INR 201 billion. Consequently, traders expect its shares to go up sharply. Premiums on INR 5,200-INR 5,300 strike prices increased 70–80%.

 

Hindalco Industries finishes the list of Nifty 50 companies declaring results Friday. Traders have taken decent short positions ahead of the company's earnings. Premiums on put contracts with strike prices at INR 960 rose over 8%, and open interest on this contract rose over 180,000. Higher aluminium and copper prices and a jump in net sales realisations are seen to have boosted the on-year growth in operating profit and the bottom line of the company. The company is expected to report a consolidated net profit of INR 58.17 billion for the June quarter. Excluding an outlier estimate of revenue of INR 1.13 trillion from Kotak Securities, the average estimate for the company's top line is INR 870.02 billion, up 35% on year.

 

--Nifty 50 August closed at 24738.00, up 90.30 points; 102-point premium to the spot index
--Nifty 50 September closed at 24859.00, up 89.00 points; 223-point premium to the spot index
--Nifty 50 October closed at 24986.00, up 73.50 points; 350-point premium to the spot index

 

Reliance Industries, State Bank of India, Trent, HDFC Bank, Hindustan Aeronautics, Cummins India, Swiggy, Kalyan Jewellers India, BSE, and Shriram Finance were the most actively traded underlying stocks Thursday.  End

 

Edited by Saji George Titus

 

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