Bank Nifty Expiry today: Options traders expect index to close between 51,300 and 51,500

Equity markets opened lower on Wednesday but managed to pare some of the losses by noon. The benchmark Nifty 50 was trading 0.59% lower at 25,130.25 while the Sensex was trading 0.50% lower at 82,143.47 by noon.

The Bank Nifty index, which has its expiry on Wednesday, was trading 0.55% lower at 51,404.95 at 12:00 p.m. The options market is currently factoring in a strong resistance at the 51,500 level with the Call strike having an open interest of 1.41 crore at noon. The change in open interest for the strike stood at 1.17 crore.

On the downside, the market is reflecting a support at the 51,300 level with the Put options at this strike having an open interest of 1.32 crore at the time of writing. The change in open interest stood at 1.13 crore. .

The max pain of Bank Nifty stood at 51,400 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 very close to its 21-period and 50-period exponential moving averages (EMAs) and reflected a put-call ratio (PCR) of 0.93 which indicates a neutral 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 upmove or to as low as 0.45 during a downmove.

India VIX, an index that reflects the anticipated volatility in the market over the next 30 days, rose 3.97% on Wednesday to 14.39.