With the bellwether Nifty 50 index less than 1% from its lifetime high of last September, options traders have initiated trades that anticipate a new high of 26,358 by Tuesday, 25 November. The index was trading at 26,143 around noon on Thursday, just 0.5% below its record high of 26,277.35, achieved on 27 September 2024.
The expectation of a new high is borne out by data that shows options traders have been selling a combination of Nifty call and put options at the 26,100 strike for a combined ₹258 a share (75 shares make up one contract). The contracts expire on Tuesday. With this trade, sellers will pocket the entire ₹258 if the Nifty stays within 25,842-26,358 by Tuesday. They will make losses only if the index breaks either end of this range.
“Based on the options data, a new high for Nifty is around the corner,” said Kruti Shah, a quant analyst at Equirus Capital, an investment bank.
The 26,100 call expiring on 25 November saw open interest increase by 72,409 contracts to 148,783 contracts, while the 26,100 put contract saw open interest surge by 119,510 contracts to 159,789 contracts by noon on Thursday.
Open interest refers to traders’ cumulative open buy-sell positions. A relative increase in put open interest over call open interest is a bullish indicator and an increase in call open interest over put open interest implies bearish sentiment from a seller’s point of view. Currently, traders are selling more puts than calls.
“That’s because options sellers are normally better informed and have deeper pockets than options buyers,” said Rohit Srivastava, founder of analytics firm IndiaCharts. He also expects the Nifty to hit a new high over the next few sessions.
Retail still bleeding
However, both Srivastava and Equirus’s Shah said many retail investors’ portfolios were in losses despite the benchmark indices nearing record highs.
“At the portfolio level, retail investors have been bleeding for the past 15-18 months, which shows a disconnect between the benchmarks and their constituents,” Shah said.
She added, however, that she expected this underperformance to end in the next two to three months if the Nifty surged to fresh highs. This, she said, would result in momentum building up in mid and small cap counters, “enabling folios to at least break even” by January or February.
Data from IndiaCharts shows that despite the Nifty 50 approaching a record high, the broader market, as represented by the Nifty 500, has been underperforming. The number of Nifty 500 stocks at fresh 52-week high on a rolling nine-day average stood at just 18 on Wednesday, compared to 40 stocks at 52-week highs when the Nifty 500 hit a record high of 24,496.9 on 26 September 2024. The Nifty 500 was trading at 23,978 around noon on Thursday, 1.3% from its all-time high last year.
The Nifty 50 plunged 17% from its lifetime high in September 2024 to a low of 21,743.65 on 7 April 2025. As of noon on Thursday, it was up 20% from its April low at 26,143.
