Weekly F&O expiry today: Nifty 50, Bank Nifty trading guide; check likely range, outlook, more

As far as Options activity is concerned, 15800-15950 call options has seen decent build up ahead of the expiry and hence, upside seems limited on the expiry day.

On the weekly options expiry day, the expected wider trading range for NSE Nifty 50 index is 15,600-15,900; while 35,000 might act as a pivotal level for Bank Nifty. Both Nifty 50 and Bank Nifty indices ended in negative on Wednesday. Analysts expect volatility and limited upside in the market on the weekly options expiry day today. India VIX, the volatility index, cooled off 0.86 per cent from 15 to 14.87 levels since last Thursday’s close. India VIX ended yesterday at the lowest point since February 2020. Analysts say any further fall in the fear gauge might push the Nifty 50 index higher.

On Nifty options, the maximum Put OI is at 15,700 followed by 15,600 strike price. While maximum Call OI is at 15,900 followed by 15,800 strike price. Call writing was seen at 15,800 and 15,900 strikes, while Put writing was seen at 15,600, then 15,100 level strikes. Call unwinding was at 16,400 and 16,250 strikes and put unwinding was seen at 15,000 and 15,900. For Bank Nifty options, the highest open interest on the call side in the weekly expiry is at 35,000, followed by 35,500 strike; while the highest OI on the put side is at 35,000-34,500 strike.

Rajesh Palviya, Vice President, Research (Head Technical & Derivatives), Axis Securities

Nifty as per the provisional data has witnessed long unwinding with a price cut of -0.64% and a decrease in OI of 3.92lac shares compared with Tuesday, while in Bank nifty has seen short build-up with price cut of (0.67%) & OI addition of 0.95 lac shares. The sentiment indicator PC Ratio (Nifty) is currently trading at 1.14 near the median line indicating positive bias. In Nifty the highest OI on the CALL side in the weekly expiry scheduled 17th June is at 15,800 & 15,900 strikes wherein writing of 34.13Lac shares was seen in 15,800 strike & 26Lac in 15900 strike, while on the PUT side highest OI is at 15,700 & 15,600 strikes and writing of 10.35Lac share was seen at 15,600 strike. So the tentative range for the weekly expiry is likely to be between 15,900 to 15,600. In Bank Nifty the highest OI on the CALL side in the weekly expiry is at 35,000 -35,500 & 36,000 strike; while on the PUT side highest OI is at 35,000-34,500 & 34,000 strike, with 35,000 acting as a pivotal level for this weekly expiry as there has been addition of 12.15Lac shares on CALL side & 5.62 Lac addition on PUT side suggesting that any sustain move on either side of this level will decide the trend in Bank nifty.

The strategy for Thursday will be market neutral strategy called Long Straddle; wherein traders need to buy one lot each of Nifty 15,750 Call at 65, and 15,750 Put at 54 options to benefit from sharp movement on either side and trader gains so long as the market moves, irrespective of its direction. The total premium outflow will be of Rs 8,900 (65+54 =119 points) and breakeven point will be 15,869 on upside and lower breakeven point will be 15,631. The sharp swing breaching break even points on either side will increase the volatility, which in turn will raise the price of the call or put option eventually generating profits in strategy while if there is no movement, and Nifty trades range bound then the maximum loss will be restricted to the premium paid ie Rs 8,900.

Sameet Chavan, Chief Technical Analyst, Angel Broking

As far as Options activity is concerned, 15800-15950 call options has seen decent build up ahead of the expiry and hence, upside seems limited on the expiry day. The way the broader market behaved on Wednesday, traders are advised to lighten up aggressive longs on intraday bounce. In fact, one can take a punt by buying At The Money Put option for Nifty and Banknifty in case we see them trading around 15820 and 35250, respectively.

Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Gemstone Equity Research & Advisory Services

Throughout the day, the NIFTY witnessed heavy Call writing at 15800, 15850 and 15900 levels; out of this, 15800 strike saw maximum addition of call OI of 3.4 million shares. Unless this level is taken out, NIFTY will face extremely stiff resistance on the weekly options expiry day tomorrow. These three strikes also saw significant PUT OI unwinding as well.

Ajit Mishra, VP – Research, Religare Broking

Things to consider when trading Nifty and BankNifty on weekly expiry day are
(a) use open interest (OI) data of Nifty and Banknifty to gauge the participants positioning (long buildup/ short buildup/ long unwinding/ short covering)
(b) Option chain analysis: look for options strikes that have highest opening interest in both Call and Put. Never trade beyond those options strikes having highest open interest (OI) build up.
(c ) Square of In-The-Money (ITM) long options before expiry. If in-the-money long options are allowed to expire, STT would be levied as per law on the entire contract value plus premium on the sell side which is 0.125%.
(d) Always trade with strict stop loss because of theta (Time decay) on expiry day.
(e) Proper position sizing and money management is equally critical.

(The recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)