Bank Nifty Expiry today: Here’s what the options market is saying

Equity markets opened slightly lower on Tuesday and bounced off its lows to trade flat by noon. The benchmark Nifty 50 was trading flat at 25,809 while the Sensex was trading 0.04% higher at 84,337 by noon.

The Bank Nifty index, which has its expiry on Wednesday will be expiring on Tuesday due to the upcoming bank holiday on the occasion of Gandhi Jayanti. The Bank Nifty was trading 0.17% higher at 53,062 at 12:00 p.m. The options market is currently factoring in a strong resistance at the 53,000 level with the Call strike having an open interest of 83.88 lakh at noon. The change in open interest for the strike stood at 67.85 lakh.

Interestingly, on the downside, the market is reflecting a strong support at the 53,000 level as well with the Put options at this strike having an open interest of 66.66 lakh at the time of writing. The change in open interest stood at 48.38 lakh.

The max pain of Bank Nifty stood at 53,000 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. However, this level is dynamic and keeps shifting when the market moves significantly in either direction.

On a 15-minute chart, the index traded close to its 21-period and below its 50-period exponential moving averages (EMAs) and reflected a put-call ratio (PCR) of 0.69 which indicates a bullish sentiment. PCR is the ratio of the number of puts to the number of calls of an asset. In extreme market movements, the PCR may shoot up to as high as 1.85 during an up move or to as low as 0.45 during a down move.

India VIX, an index that reflects the anticipated volatility in the market over the next 30 days, fell nearly 1.3% on Wednesday to 16.73.