The National Stock Exchange’s (NSE) benchmark index — Nifty — witnessed extreme volatility on Tuesday — its weekly expiry day for futures and options contracts on the exchange. After opening 36 points lower, the Nifty remained under pressure throughout the day.
At 3:15 pm the index was down by 139.10 points or 0.58% at 23640.05. It entered closing auction session with 165.6 points or 0.70% jump to 23805.65 only to fell sharply in few seconds. The Nifty fell 430.95 points or 1.81% from high of 23805.65 to a low of 23374.70. Later it recovered 260.40 points or 1.11% to close the session at 23635.10 thereby swinging 850 points. It declined 144.05 points or 0.61% compared to previous close.
NSE recorded Rs 2,099 crore turnover during the CAS session on Tuesday more than double as compared to previous day.
With Rs 160.88 crore turnover, HDFC Bank, was most traded stocks, followed by ICICI Bank (Rs 144.94 crore), Bharti Airtel (Rs 131.92 crore) and Reliance Industries (Rs 121.28 crore).
A similar volatility were recorded in the Sensex on last Thursday (September 3) as the index swung nearly 4,000 points amid weekly expiry of its derivative contracts.
The index’s indicative closing price slumped from 76,510 on 3:18 PM to 74,373 at 3:20 PM, an over 2,100 point drop before recovering over 1,700 points to close at 76,153, down 417 points, or 0.55%, from the previous close.
As a result of these sharp swings, Sensex put option premiums surged by 400–500% within minutes. These sharp swings have increased uncertainty for derivatives traders, particularly on expiry days.