Bankex put sees a dramatic surge of 14,700% on expiry day
Bankex options saw a significant surge during Thursday's expiry session. This unusual spike occurred within minutes, causing considerable trader reaction. Indicative closing levels briefly showed a steeper Sensex decline than expected. Several Bankex put options experienced sharp premium jumps, impacting sellers. The Sensex and Bankex closed lower, while Nifty and Bank Nifty saw smaller declines.
Mumbai: On the final day of BSE derivatives contract expiries, an unprecedented surge of 14,700% was observed in Bankex options, particularly the Bankex 65,000 Put. This dramatic increase transpired within minutes of the market opening, following the newly implemented Closing Auction Session (CAS). Indicative closing levels briefly suggested a 3% decline in the Sensex, which was significantly steeper than the initial drop of 0.3-0.4%.
Traders attributed the sharp drop in indicative closing levels to panic, leading to stop-losses being triggered and contributing to increased volatility. Several Bankex put options around the 65,000 strike price also experienced substantial jumps in premiums, ranging from 500% to 4,500%. The unexpected volatility on the expiry day led to heavy losses for several options sellers, which quickly spread across social media platforms.
At the session's close, the Sensex fell to 76,933.59, down 0.70%, while the Bankex settled at 64,313.15, down 1.67%. The Nifty and Bank Nifty also showed modest declines, closing at 24,090.85 and 57,509.95, respectively, with losses of 0.48% and 0.47%.
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