NIFTY50 Expiry today: 25,000-mark transition into strong support from being a resistance

Equity markets opened marginally lower on Thursday but pared the losses to trade in the green by noon. The benchmark Nifty 50 was trading 0.11% higher at 25,079.55 while the Sensex was trading 0.19% higher at 81,938.92 by noon.

For Nifty 50, which has its expiry on Thursday, the options market is currently factoring in an immediate resistance at the 25,100 level with the open interest on this call strike amounting to 2.06 crore. The change in open interest for the strike stood at 1.23 crore at 12:00 p.m.

On the downside, the market is reflecting a strong support at the 25,000 level with the Put options at this strike having an open interest of 2.69 crore at the time of writing. The change in open interest stood at 1.65 crore. It is noteworthy that 25,000 was a strong resistance for quite some time and the transition of the level into a strong support comes in the wake of an expected rate cut by the US Federal Reserve following Jerome Powell’s dovish remarks at the Jackson Hole summit at Wyoming.

The max pain of Nifty 50 stood at 25,050 at the time of writing. The max pain theory shows the level at which option sellers are likely to have the least loss on expiry.

On a 15-minute chart, the index was trading slightly below its 21-period exponential moving average (EMA) but above its 50-period EMA. The index also reflected a put-call ratio (PCR) of 1.14 which indicates a neutral sentiment. PCR is the ratio of the number of puts to the number of calls of an asset. It is noteworthy that in extreme downward and upward market movements, the PCR may hit as low as 0.5 or as high as 1.8, respectively.

India VIX, an index that reflects the anticipated volatility in the market over the next 30 days, rose 0.22% on Thursday to 13.98.