Expiry trade setup: Here's what options data indicate for NIFTY50's expiry

GIFT NIFTY indicates a gap-down opening for Indian markets on Thursday amid weak global cues. The US markets closed mixed after the Federal Reserve held the rates steady, citing rising inflation. The Asian markets opened red on Thursday morning, with the Japanese and Hong Kong indices trading over 1% lower.

NIFTY50

Max call OI:25,000

Max put OI:24,800

(Ten strikes to ATM, 19th June expiry)

NIFTY50 closed in red on Wednesday after facing strong selling pressure at intraday high levels. The index continued its consolidation and maintained a neutral outlook amid any positive market cues. The global market cues remain weak on Thursday morning, with the geopolitical situation escalating in the Middle East. Therefore, the outlook remains neutral with a negative bias for Thursday’s trading session.

On technical charts, the index formed an inverted hammer pattern, adding some hopes for a reversal. However, the outlook remains negative due to weak global market cues. The index held the support of the 21 EMA again on Wednesday. Experts believe the index may trade in red on Thursday. On the options data front, the 25,000 calls hold the highest open interest, indicating the resistance level for today’s expiry. Similarly, on the downside, 24,500 puts hold the highest open interest, indicating strong support for the markets.

Bullish outlook

Traders with bullish sentiment can execute a long call strategy by buying 24,800 calls. The strategy would turn profitable after the index moves above 24,873.

Bearish outlook

Traders with a bearish outlook can execute a long put strategy by buying a put strike of 24,850. The strategy would turn profitable after the index moves below the 24,738 level.