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  1. Nifty Midcap Select Expiry: Options market is factoring in 10,825 as the crucial level

Nifty Midcap Select Expiry: Options market is factoring in 10,825 as the crucial level

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2 min read • Updated: May 13, 2024, 12:13 PM

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Summary

The Nifty Midcap Select index, which has its expiry on Monday, declined 0.4% to trade at 10,829 at 11:48 a.m. The options market is currently factoring-in a resistance at the 10,900 level with the highest open interest on the call side amounting to 71.9 lakh at this strike. The change in open interest for the strike stood at 57.2 lakh at 11:45 am.

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Nifty Midcap Select Expiry: Options market is factoring in 10,825 as the crucial level

Equity markets opened lower on Monday and continued to trade in the red with the benchmark Nifty 50 trading 0.43% lower on Tuesday at 11:46 a.m. while the Sensex was trading 0.51% down.

The Nifty Midcap Select index, which has its expiry on Monday, declined 0.4% to trade at 10,829 at 11:48 a.m. The options market is currently factoring in a resistance at the 10,900 level with the highest open interest on the call side amounting to 71.9 lakh at this strike. The change in open interest for the strike stood at 57.2 lakh at the time of writing.

On the downside, the market is reflecting support at the 10,800 level with the strike having an open interest of 66.9 lakh at the time of writing. The change in open interest stood at 48.1 lakh.

The max pain of Nifty Midcap Select stood at 10,825 at 11:45 am. The max pain theory shows the level at which option sellers are likely to have the least loss on expiry.

The index reflects a put-call ratio (PCR) of 0.9 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 market movements, the PCR has gone as low as 0.5 or sometimes even below 0.5 only to revert slightly to the mean.

Indian Hotels Company, which constitutes 6.6% of the index, was trading 0.43% lower on Monday while Cummins India, which has a weight of 5.87%, was trading 2.38% higher. Lupin, which has a weight of 5.24%, was trading 0.73% higher. Other constituents of the index like HDFC Asset Management Company and Federal Bank were trading lower by 2.42% and 0.31%, respectively.