Nifty Fin Service Expiry today: Options market considers 23,850 to be crucial level

Equity markets opened higher on Tuesday but faced selling pressure to trade in the red by noon. The benchmark NIFTY50 and the SENSEX were trading 0.20% and 0.16% lower at 25,077 and 81,851, respectively, at 12:00 p.m. The Nifty Financial Services index, which expires on Tuesday, was trading 0.08% higher at 23,878 at noon.

The options market is currently factoring in strong resistance at the 23,900 level, with the open interest on the Call strike amounting to 97.50 lakh. At the time of writing, the change in open interest for the strike stood at 84.40 lakh.

On the downside, the market is considering the 23,800 level to act as an immediate support. The open interest on this Put strike stood at 57.23 lakh while the change in open interest stood at 48.22 lakh by 12:00 p.m.

The max pain of Nifty Financial Services stood at 23,850 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. However, this level is dynamic and is prone to change toward the end of the session. On a 15-minute chart, the index was trading above its 21-exponential moving average (EMA) and below the 50-EMA.

India VIX, an index that reflects the anticipated volatility in the market over the next 30 days, fell 3.71% on Tuesday to 19.70.

The Nifty Financial Services index reflected a put-call ratio (PCR) of 0.66 which indicates a bullish sentiment. PCR is the ratio of the number of puts to the number of calls of an asset. In extreme downward and upward market movements, the PCR may hit as low as 0.5 or as high as 1.8, respectively.