Nifty Midcap expiry today: The options market is factoring in 12,825 as the crucial level

Equity markets opened higher on Monday and continued the positive momentum through noon. The benchmark Nifty 50 and the Sensex were trading nearly 0.6% higher at 24,981.10 and 81,849.25, respectively.

The Nifty Midcap Select index, which has its expiry on Monday, opened higher and continued its positive momentum to trade 1.33% higher at 12,855.70 by noon. The options market is currently factoring in resistance at the 12,900 level, with the open interest at this call strike at 98 lakh at 12:00 p.m. The change in open interest for the strike stood at 80.2 lakh at the time of writing.

Meanwhile, on the downside, the market is factoring in support at the 12,800 level, which saw open interest of 91.1 lakh at the time of writing. The change in open interest stood at 89.6 lakh.

The max pain of Nifty Midcap Select stood at 12,825 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.

The index reflects a put-call ratio (PCR) of 0.99, 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 upward market movements, the PCR has gone to as high as 1.8.

On a 15-minute chart, the index traded above its 21-exponential moving average (EMA) and 50-EMA, indicating a bullish sentiment.

Indian Hotels Company, which constitutes 6.22% of the index, was trading 0.02% lower on Monday, while Cummins India, which has a weight of 6.18%, was trading 1.9% higher. Persistent Systems, which has a weight of 5.09%, was trading 0.06% lower. Other constituents of the index, like Bharat Forge and Federal Bank, were trading higher by 3.21% and 1.86%, respectively.