Nifty 50 Expiry today: Index tanks on expiry day, here’s what the option market is saying

Equity markets opened gap down on Thursday. Despite efforts to stage a recovery, the index succumbed to selling pressure. The benchmark Nifty 50 was trading 1.53% lower at 25,402 while the Sensex was trading 1.55% lower at 82,960 by noon.

For Nifty 50, which has its expiry on Thursday, the options market is currently factoring in a strong resistance at the 25,500 level with the open interest on this call strike amounting to 1.44 crore. The change in open interest for the strike stood at 1.45 crore at 12:00 p.m.

On the downside, the options market is factoring in an immediate support at the 25,400 level, with the Put options at this strike having an open interest of 89.98 lakh at the time of writing. The change in open interest stood at 74.02 lakh.

The max pain of Nifty 50 stood at 25,500 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 below its 21-period exponential moving average (EMA) and 50-period EMA. The index also reflected a put-call ratio (PCR) of 0.59 which indicates a bullish 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, fell 1.87% on Thursday to 18.90.