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Informist, Friday, Aug. 21, 2026

 

By Eshitva Prakash

 

MUMBAI – Traders sold call contracts across the options chain of the Nifty 50 index as high crude oil prices and a quick reversal of the relief in US bond yields roiled sentiment in the equity market. Premiums on near-the-money call contracts were still expensive, but nowhere close to their prices on Thursday, as chances of the headline index bouncing sharply back from immediate support levels lessened. Heavy open interest build-up around the Nifty 50's closing level is likely to lead to a range-bound session Monday. 

 

On Friday, the Nifty 50 ended at 24252 points, up 20.15 points or just 0.1%. Information technology companies once again came under selling pressure and stocks sensitive to crude oil prices also exerted downward pressure on the 50-stock index. In contrast, stocks of metal companies and banks ended the session higher. Companies engaged in the mining of precious metals were in steady demand as a weaker US dollar pushed gold and silver rates higher. 

 

US Treasury Secretary Scott Bessent told CNBC Thursday that an accelerated buyback of government debt could be higher than the previously announced $4 billion figure. While the buyback plan had alleviated the pressure on US yields temporarily, concerns about high artificial intelligence expenditure and the US gross national debt surpassing the $40-trillion mark triggered more selling of sovereign notes. Soon after, long-term yields resumed their rise and the US 30-year yield settled sharply higher Thursday.

 

Many traders adopted a risk-averse approach to intraday trading Friday after India VIX – the market's fear gauge – rose over 4% to 11.20 points. High crude oil prices supported the argument in favour of risk-averse and stock-specific trading. While crude rates rose only slightly Friday, the October futures contract of the commodity traded at $94.08 per barrel, near its highest level in a month. Oil prices rose after US President Donald Trump threatened "tremendous economic consequences" on nations trading with Iran. The US Environmental Protection Agency issued an early waiver to boost fuel supply as pump prices are still elevated in the country.

 

Open interest in near-the-money call options increased significantly Friday, with the 24300 strike price emerging as the highest call base. Premiums on the strike price declined over 21% and the implied volatility at this strike was just 8.37 points. Further out-of-the-money call contracts were also sold, with premiums across 24400-24700 strike price declining 30-40%. A fall in open interest at 25000 strike price signifies long unwinding ahead of the weekly and monthly expiry of options contracts Thursday.

 

On the other side of the options chain, the 24000 strike price had the highest put base, indicating a support level for the Nifty 50. Put writers continued to peel off premiums across short contracts, helped by an accelerated theta decay. Premiums across 24200-23800 strike prices declined 20-30%. Meanwhile, deep in-the-money contracts' premiums rose as institutional players squared off existing positions and unwound downside insurance. 

 

"Overall, (market) sentiment remains sideways to mildly positive," Rupak De, senior technical analyst at LKP Securities, said. The Nifty 50 will find support at 24200 points and a fall below this level will likely trigger a correction towards 24000 points, De said. He sees the 50-stock index facing resistance at 24350 points, a rise above which is likely to take the index towards 24500 points.

 

--Nifty 50 August closed at 24288.00, down 5.00 points; 36.00-point premium to the spot index
--Nifty 50 September closed at 24394.90, up 2.30 points; 142.90-point premium to the spot index
--Nifty 50 October closed at 24516.10, up 2.70 points; 264.10-point premium to the spot index

HDFC Bank, Reliance Industries, Axis Bank, Bharti Airtel, State Bank of India, Infosys, Kotak Mahindra Bank, Tata Consultancy Services, Bajaj Finance, and JSW Steel were the most actively traded underlying stocks Friday.  End

 

US$1 = INR 95.70

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

 

Edited by Avishek Dutta

 

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