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F&O Expiry: Here's what the options data suggest for Nifty, Bank Nifty

The PCR for Nifty and Bank Nifty for the April series is above 1, suggesting presence of strong Put writes for both derivatives.

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Rex Cano Mumbai

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Nifty
Bias: Range-bound Trading Likely

Today is settlement day for the futures & options contract for the April series. At the end of trades on April 26, the PCR (Put Call Ratio) for Nifty April contracts stood at 1.14.

In general, a PCR above 1 means that more traders anticipate a downside in the near term hence more Puts are bought (mostly by retail/ small traders). However, the contrarian view suggests the savvy or the traders with bigger pockets write (Sell) the Puts in anticipation of a limited downside.

The Nifty April Calls are having the highest OI (Open Interest) at 18,000 and 17,900 Strike Prices, indicating likely resistance above 17,900 levels. 

On the other hand, the highest OI in Puts is seen at 17,700 Strike Price followed by 17,800 and 17,600. The OI premium suggests support emerging around 17,750 level in case of a downside.

Thus to conclude, the Nifty 50 index is anticipated to move in 17,750 - 17,900 range in today's expiry session.

Further, based on the OI data, sustained trade above 17,900 could trigger a sharp short-covering rally towards the 18,000 mark. Similarly, sustained trade below the 17,700 level can trigger a panic among Put writers.

Bank Nifty
Bias: Limited Downside Likely

The Bank Nifty PCR for the April series stands at 1.33, which again underlines the confidence of stronger players focusing on a limited downside for now.

In Wednesday's trading session, the Bank Nifty witnessed a sizable build-up in OI at the 42,800, 42,700, 42,600, 42,500 and 42,400 Puts. On the Call side, notable build-up was seen at 43,300 Strike Price.

Among Calls, the highest OI is seen at 43,000 followed by 44,000 and 43,500 Strike Prices. The OI premium suggests likely resistance for the Bank Nifty in the 43,080 - 43,100 range; above which the index could spurt towards the 43,300 level.

Among Puts, the highest OI is seen at 42,500 Strike Price followed by 42,000 and 42,600. The downside for now seems capped around 42,500 levels, with considerable support seen emerging around 42,650 levels.

"Bulls have kept their hold on the Bank Nifty as the index ended in the green, recovering from the morning losses on Wednesday. In the short term, the trend remains bullish with the new range for traders being 42,500 - 43,000, where writers have significant build-up. On the lower end, a fall below 42,500 may trigger panic in the banking space; whereas on the higher end, a decisive rise above 43,000 may induce further rally," said Rupak De, Senior Technical Analyst at LKP Securities in a note.

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First Published: Apr 27 2023 | 8:39 AM IST

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