Informist, Monday, Feb 12, 2024

By Anshul Choudhary

MUMBAI – Traders are writing call options as the Nifty 50 fell nearly 170 points today and closed at its lowest level this month due to profit booking, with banking stocks as major losers. Traders added short positions in index derivatives as well as in Nifty Bank options, analysts said. 

The Nifty 50 closed at 21616.05 points. The selling was sharper in the broader market with small-cap indices closing 3.6-4% lower. "Sentiments were negative today after seeing profit booking, especially that in PSU (public sector unit) banks," Mehul Kothari, assistent vice-president of technical research at Anand Rathi Share And Stock Brokers said. He said that call writing was seen at 21700 strike prices. 

On the call side, premiums across strike prices fell. Premiums at 21700 strike prices fell 101 rupees to 106 rupees, that of 21800 fell 81 rupees to 69 rupees, and that of 21900 fell 61 rupees to 43 rupees. However, some traders remained hopeful of a bounce back in the index with the highest open interest on the call side remaining at 22000 points.

On the put side, premiums rose, indicating some weakness is expected in the Nifty 50. Premiums at 21600 strike prices rose 47 rupees to 127 rupees, that of 21500 rose 31 rupees to 87 rupees, and that of 21400 strike price rose 19 rupees to 57 rupees. The highest open interest was seen at 20800 strike prices, which also saw the highest open interest addition.

Sentiment around banking stocks was significantly weak, with no expectation of any major bounce back. Premiums on the 46000 calls, which was also seen as a resistance last week, fell 173 rupees to 39 rupees, and that of 45000 fell 584 rupees to 262 rupees. On the put side, premiums at 44000 rose 32 rupees to 61 rupees. The highest open interest on the call side was at 47000 level, followed by 46000. Highest open interest on the put side was at 43000 level, followed by 44000.

--Nifty 50 Feb closed at 21696, down 146.60 points; 79.95-point premium to spot index

--Nifty 50 Mar closed at 21845, down 144.45 points; 228.95-point premium to spot index

--Nifty 50 Apr closed at 21995, down 143.35 points; 378.95-point premium to spot index

End

Edited by Deepshikha Bhardwaj

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