Sensex Expiry today: Options market pricing in resistance at 83,500

Equity markets opened lower on Friday but recovered from the day’s low to trade higher. The benchmark Nifty 50 was trading higher by 0.70% at 25,425 at 12:00 p.m.

The Sensex, which has its expiry on Friday, saw was up by 0.83% at 83,181 at 12:00 p.m. The options market is currently factoring in an immediate resistance at the 83,500 level with the open interest at this Call strike amounting to 14.10 lakh. The change in open interest for the strike stood at 8.24 lakh.

On the downside, the market is reflecting a strong support at the 82,000 level with the Put options at this strike having an open interest of 18.89 lakh at the time of writing. The change in open interest stood at 1.35 lakh.

The max pain of the Sensex stood at 82,700 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 above its 21-period and below its 50-period exponential moving averages (EMAs). The index reflects a put-call ratio (PCR) of 1.09 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 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, rose 8.4% on Friday to 20.49 by noon.