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Informist, Tuesday, May 12, 2026

 

By Gopika Balasubramanium

 

MUMBAI – Traders added bearish bets in the options chain of the Nifty 50, suggesting that the benchmark index is likely to slide further in the near term. The highest number of weekly Nifty 50 contracts expired between the 23400 and 23350 strike prices, with some bouts of short-covering in out-of-the-money call as well as put contracts. As for contracts expiring next week, the options thread showed traders betting on the index falling further by buying substantial put contracts. The index has fallen 3.3% so far in the first two days of the week.

 

Tuesday, the Nifty 50 closed at 23379.55 points, down 436.30 points or 1.8%. The index fell for the fourth session in a row. It is down around 4% in this period. Market participants are worried by the delay in peace negotiations between the US and Iran and by the high crude oil prices and the continued closure of the Strait of Hormuz, which are pushing many economies around the globe into an energy crisis. The near-month futures contracts of Nifty 50 also closed lower.

 

Traders primarily added short positions in call options, Om Mehra, technical and derivatives analyst at SAMCO Securities, said. This indicates that traders are building bearish bets in the options chain of the Nifty 50 expecting a fall in the index. In the near term, 23200 points is a key level to hold, he said. For the index to rise, it should close above 23600-23650 points, Mehra said.

 

Traders wrote most call options expiring Tuesday at the 23400 strike price with an open interest of 24.76 million. Meanwhile, they bought puts at the 23350 strike price. Around 22 million put contracts were written at that strike price.

 

Tuesday, traders wrote extreme out-of-the-money call contracts expiring May 19 and premiums at strike prices such as 24000, 25000, and 25500 declined 44-68%. While the premium on the 24000 call was at INR 61.05, that on the 25500 call was at a negligible INR 2.30. Traders cut down contracts at the 23500 call, which had a premium of INR 219.90. The premium fell 54% Tuesday. The highest concentration of open interest was at the 24000 call and maximum addition was at the 23500 call.

 

On the put side, traders sought contracts expiring next week at out-of-the-money strike prices, indicative of bearishness in the market. Premiums on the 23500 put and 22800 put more than doubled. Traders opened over 2 million new contracts at the 23500 strike price, which also showed the highest addition. Traders also bought puts at strikes above the spot level such as 23400 and 23600, with premiums surging 118-132%. The highest addition and maximum concentration of open interest were at the 23500 put.

 

--Nifty 50 May closed at 23470.00, down 398.50 points; 90.45-point premium to the spot index

--Nifty 50 June closed at 23566.50, down 408.10 points; 186.95-point premium to the spot index

--Nifty 50 July closed at 23689.20, down 417.10 points; 309.65-point premium to the spot index

 

State Bank of India, HDFC Bank, Reliance Industries, Infosys, Multi Commodity Exchange of India, Oil and Natural Gas Corp., and Dixon Technologies (India) were the most actively traded underlying stocks Tuesday.

 

Edited by Rajeev Pai

 

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