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Nifty support at 15200, use call ladder for 30 June F&O expiry for gains; Bank Nifty to trade flat-to-negative

Nifty Put options OI distribution shows that 15,200 has highest OI concentration followed by 15,300 & 15,400 which may act as support for current expiry

Nifty, bank nifty
The strategy which we are suggesting for this weekly expiry dated 30th June is a Moderately Bullish strategy called as CALL LADDER

By Rajesh Palviya

In Nifty current series there has been a Long Unwinding witnessed with decrease in price of -4.73% and decrease in OI by -3% as of Wednesday wherein there was unwinding of 3.01 lakh shares in OI, decreasing from 112.81 lakh to 109.79 lakh shares. NSE Nifty 50 current month rollover stands at 24%, while Nifty Put Call Ratio, a sentiment indicator used by traders to gauge the market sentiment and mood, is currently at 0.81 compared to 1.28 of last week, indicating a flat-to-cautious movement for expiry.

India VIX, a market volatility indicator often called the fear gauge, is currently trading 21.30% compared to 22.87% of last week. Implied Volatility of Nifty ATM options for the current series is at 21.63% in contrast to 24.17% of last week, indicating lower volatile movement on either side in expiry session.

Nifty Put options OI distribution shows that 15,200 has highest OI concentration followed by 15,300 & 15,400 which may act as support for current expiry and on the Call front 15,700 followed by 15,500 & 15,600 witnessed significant OI concentration and may act as resistance for current expiry. Options data suggest an immediate trading range between 15,600 and 15,200 levels.

Nifty Open Interest Concentration

Nifty Option OI Change

Nifty Bank Outlook

In current series there has been a Long Unwinding witnessed in Bank Nifty Fut with an decrease in price of -6.62% and decrease in OI by -11% as of Wednesday wherein there was unwinding of 2.50 lakh shares in OI, decreasing from 23.79 lakh to 21.29 lakh shares. Bank Nifty Current series rollover stands at 25%, while Bank Nifty Put Call Ratio is currently at 0.86 compared to 0.69 of last week indicating flat-to-negative movement for expiry.

Bank Nifty Put options OI distribution shows that 32,500 has highest OI concentration followed by 32,000 & 31,500 which may act as support for current expiry and on the Call front 33,500 followed by 34,000 & 33,000 witnessed significant OI concentration and may act as résistance. Options data indicated an immediate trading range between 33,500 and 32,300 levels.

Significant Call writing in Bank Nifty was seen at 33,500,33,000 & 34,000 strike while on put side it was seen at 32500, 32800 & 32500.

Bank Nifty Option OI Concentration

Bank Nifty Option OI Change

NSE Nifty 50 trading strategy for 30th June F&O expiry

The strategy which we are suggesting for this weekly expiry dated 30th June is a Moderately Bullish strategy called as CALL LADDER, which involves Buying of one lot of NIFTY 15,450 Call @ 168 & selling of one lot each of 15,650 Call @82 & one lot of 15,850 Call @ 36. The cost of the strategy involves outflow of Rs 2,500/- which is the maximum loss if NIFTY trades & remains below 15,500 levels on expiry .The maximum profit of Rs 7,500/- will be attained above 15,650 levels, while strategy will start making loss if Nifty crosses 16,000, hence it’s advisable to exit the strategy in total to avoid UNLIMITED losses above 16,000. Break Even points of the strategy are 16,000 on Upside & 15,500 on the lower side.

(Rajesh Palviya, VP – Research (Head Technical and Derivative) at Axis Securities. Views expressed are the author’s own.)

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