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Informist, Monday, Aug. 24, 2026

 

By Eshitva Prakash

 

MUMBAI – Call sellers doubled down on their positions on the derivatives chain of the Nifty 50 after the headline index fell from the session's highs on profit-taking. Premiums across the call side declined sharply, particularly due to a high theta decay, as traders exited long positions before the monthly expiry of the Nifty 50 derivatives contract. While crude oil prices dropped after a six-session rally, they were still high enough to check the rise in the underlying index, supporting negative delta positioning.

 

A hefty build-up in open interest around spot levels indicates that the Nifty 50 is likely to move in a range Tuesday. However, some traders buying fresh puts at near-the-money strike prices also suggests that a small decline is possible. The highest call base is at 24300 strike price and the highest put base is at 24000 strike price, indicating resistance and support levels, respectively, for the 50-stock index. Put writing activity at 24200 points shows institutional traders are likely to step in to help the Nifty 50 reclaim the 24200 mark, but it is unlikely that the benchmark index will rise meaningfully above this level.  

 

The Nifty 50 ended at 24219.05 points Monday, down 0.1% from Friday. Metal stocks were the clear outperformers in the session and select pharmaceutical and information technology stocks lent support to the headline index. A fall in shares of banks, some automobile companies, and financial services capped the Nifty 50's rise. The August futures contract ended at a near 31-point discount to the spot index.

 

Monday's sell-on-rise trading and options positioning reflects a pessimistic market sentiment, which is likely to limit the upside for the Nifty 50 in case of a recovery. A part of this negative sentiment is driven by US Treasury Secretary Scott Bessent hinting at tightening economic sanctions on Iran. The official is expected to reveal the details of Washington's plans later in the day, prior to which he warned of an "economic D-Day" for Iran in a newspaper op-ed. The Strait of Hormuz continues to be effectively closed for transit as fewer than 20 commodity vessels passed through the waterway over the weekend, data from Kpler's website showed. At 1552 IST, the October futures contract of Brent Crude Oil was down 1.7% at $92.76 per barrel on the Intercontinental Exchange.

 

The premium on the put contract at 24000 strike price declined nearly 27% to INR 8.70 while open interest at this level declined, indicating a weakening of support. Premiums on put contracts at 24100-24200 strike price, meanwhile, rose 10-40%. A fall in open interest at 24200 strike price also shows a high possibility of the Nifty 50 falling below this level after the closing auction session yet again lifted the headline index higher than the level at 1515 IST when the continuous trading session ends.

 

At the other end of the options chain, premiums for out-of-the-money strike prices declined significantly, primarily due to high theta decay. At the 24300 strike price, call options were valued at INR 26.30, down nearly 64% from Friday. Across 24400-24700 strike prices, premiums declined 15–60%. Some further out-of-the-money contracts were purchased, mainly as a hedging instrument.

 

ICICI Securities has advised traders to go short on Patanjali Foods. It has suggested buying the September futures contract of the stock at INR 349-INR 352 and targeting INR 318 while setting the stop-loss at INR 368.1. Patanjali Foods has also failed to exhibit any recovery and witnessed continued short additions suggesting prevailing weak sentiments, the brokerage said. The INR 360 strike holds the highest call base, highlighting strong resistance and suggesting that any upside is likely to remain capped. Given the rejection from INR 360, potential fresh short build-up and strong call resistance, the brokerage expects Patanjali Foods to move towards INR 320 levels in the coming sessions.

 

ICICI Securities has also advised traders to carry forward their long positions on the futures contract of Hindustan Aeronautics. The brokerage advised traders to "add" to the August futures contract at INR 5,035–INR 5,050 and maintain a target of INR 5,400 and set a stop-loss at INR 4,859. The second-highest call base at INR 5,000 had substantial long unwinding, which has reduced resistance at higher levels.

 

--Nifty 50 August closed at 24188.10, down 97.90 points; 30.95-point discount to the spot index
--Nifty 50 September closed at 24319.10, down 72.00 points; 100.05-point premium to the spot index
--Nifty 50 October closed at 24428.80, down 93.10 points; 209.75-point premium to the spot index

HDFC Bank, Reliance Industries, ICICI Bank, Infosys, Vodafone Idea, Axis Bank, Bharti Airtel, State Bank of India, Manappuram Finance, and Bajaj Finance were the most actively traded underlying stocks Monday.  End

 

US$1 = INR 95.75

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

 

Edited by Rajeev Pai

 

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