Nifty Fin Service Expiry today: Options market considers 22,850 as crucial level on expiry

Equity markets opened almost flat on Tuesday and continued to trade with a marginally negative bias through noon. The benchmark Nifty 50 and the Sensex were trading 0.10% lower by Tuesday noon.

The Nifty Financial Service index, which has its expiry on Tuesday, was trading 0.81% lower at 22,840.90 at 12:00 p.m. The options market is currently factoring in resistance at the 22,900 level with the open interest on this strike amounting to 1.53 crore. The change in open interest for the strike stood at 1.5 crore at the time of writing.

On the downside, the options market is factoring in support at the 22,800 level with the open interest on this strike amounting to one crore. The change in open interest stood at 86.5 lakh by 12:00 p.m.

The max pain of Nifty Financial Services stood at 22,850 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-exponential moving average (EMA) and the 50-EMA.

India VIX, an index that reflects the anticipated volatility in the market over the next 30 days, fell 1.58% on Tuesday to 15.62.

The Nifty Financial Services index reflected a put-call ratio (PCR) of 0.53 which indicates the market may be considering the current levels to be in the oversold territory. 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.

Amongst index constituents, HDFC Bank was trading 2.98% lower on Tuesday while ICICI Bank was trading 0.22% higher. State Bank of India was trading 0.72% higher while Axis Bank was trading 0.61% higher on Tuesday noon. Kotak Bank shares were trading higher by 0.43%.