Sensex expiry: Options market reflects 80,700 level to be crucial

Equity markets opened higher on Friday and gained positive momentum through noon. The benchmark Nifty 50 was trading higher by 1% at 24,646.

The Sensex, which has its expiry on Friday, traded at 80,709.75 at noon. The options market is currently factoring in a resistance at the 81,000 level with the open interest at this Call strike amounting to 22.1 lakh. The change in open interest for the strike stood at 16.5 lakh. On the downside, the market is reflecting a reasonable support at the 80,500 level, with the Put options at this strike having an open interest of 21.1 lakh at the time of writing. The change in open interest stood at 20.6 lakh.

At the time of writing, the Sensex's max pain stood at 80,700. 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 above its 21-period and 50-period exponential moving averages (EMAs). The index reflects a put-call ratio (PCR) of 1.22, which indicates that the market is considering the levels slightly in the overbought zone. 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 could hit as low as 0.45 and as high as 1.8, respectively.

India VIX, an index that reflects the anticipated volatility in the market over the next 30 days, fell 3.88% on Friday to 12.13 by noon.

Reliance Industries was trading higher by 0.7% while TCS was up 1.7%. HDFC Bank was trading 0.6% lower, while Bharti Airtel was up 2.7%. ICICI Bank was trading higher by 0.1% on Friday.