A significant event occurred on the Indian stock market on Thursday: shortly before the close of trading, one of the premium instruments of the Sensex index rose by approximately 35 times. This led to a sharp increase in profits for investors who invested in this option.
The Indian stock market demonstrated impressive growth on Thursday. The Sensex index closed at 74315, showing a rise of 1534 points or 2.11 percent. Simultaneously, Nifty reached the mark of 22,997, increasing by 374 points or 1.66 percent. During this period, strong buying activity was observed in the 74200 Option Call instrument, which suddenly exceeded the mark of 115 rupees.
According to a CNBC report, this call initially cost about 10 rupees, then dropped to 3 rupees, and subsequently surged to 115 rupees. Experts note that such phenomena are rare in the market, but such cases have been observed since the introduction of SEBI's CAS rule.
It is believed that in the last hours of trading, most option premiums are slowing down and beginning to decline. Premiums below 10 rupees are falling particularly fast, and the chances of their recovery are extremely small. Therefore, if any premium instrument demonstrates such a sharp rally at this time, it may indicate the presence of some violations. Similar assumptions are being made regarding this premium instrument.
If someone purchased the 74200 option at a price of about 3 rupees, they could have made a 35-fold profit on each lot. Since one lot in Sensex consists of 20 units, this means that with an investment of 60 rupees per lot, a profit of 2300 rupees could have been made. However, it should be emphasized that this is only an approximate estimate and is not a recommendation to buy such premiums, as such a jump may indicate market irregularities.
A call option within F&O is a contract that allows an investor to bet on an increase in the price of a stock or index without buying them directly. When an investor expects market or stock price growth, they bet on a call option and earn from the increase in premium using margin collateral. Each call option has an expiration date during which the investor can decide whether to purchase it.