0.5 C
New York
Saturday, March 6, 2021

Mind your bet! Bank Nifty could move 3% either side

Must read

GameStop tale exposes regulatory paternalism and DeFi’s true value

Cryptocurrency23 minutes ago (Mar 06, 2021 01:20PM ET) ...

Paris police clear Seine riverside over lack of social distancing

World31 minutes ago (Mar 06, 2021 01:11PM ET) ...

Mumbai: Option traders have baked in a 3 per cent move either side on Bank Nifty early this week from Thursday’s close. The 21,525-22,875 range is based on Thursday’s closing value of the 22,200 straddle — call and put option — expiring on October 8. The Bank Nifty spot closed up 3.7 per cent at 22,246 Thursday.

Derivatives experts differ on index’s reaction to the waiver of compound interest for the Rs 2 crore category by the government and the impact of Trump contracting Covid, which could result in FII selling of shares.

While Rajesh Baheti, director, Crosseas Capital, believes the index could gain another 800-1,000 points, Rajesh Palviya, derivatives head at Axis Sec, said “uncertainty” loomed over the compensation modalities to banks for forgoing interest on interest and banks could remain under pressure.

nifty bank-grph

Analysts like Rohit Srivastava of IndiaCharts, who was bullish until Thursday on technical indicators alone, doesn’t rule out a “kneejerk” reaction, given the speculation over Trump’s condition for the next few days.

To be sure, the SGX Nifty recovered almost 100 points from the day’s low on Friday to close down a modest 0.4 per cent. Short covering drove the index up on Thursday with active Bank Nifty futures posting a 13 per cent decline in open positions. A fall in open positions accompanied by rising price indicates bears covering their shorts. Also, the put-call ratio for weekly Bank Nifty options was 1.2, implying that traders had sold more puts with the belief the index wouldn’t fall.

- Advertisement -

Latest article

GameStop tale exposes regulatory paternalism and DeFi’s true value

Cryptocurrency23 minutes ago (Mar 06, 2021 01:20PM ET) ...

Paris police clear Seine riverside over lack of social distancing

World31 minutes ago (Mar 06, 2021 01:11PM ET) ...

Swedish police break up coronavirus demonstration in Stockholm

Coronavirus32 minutes ago (Mar 06, 2021 01:11PM ET) ...