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Nifty support at 15500, use Call Ladder for gains, Bank Nifty to remain tepid; trading guide for F&O expiry

Bank Nifty Put options OI distribution shows that 33,000 has highest OI concentration followed by 32,500 & 32,000 which may act as support for current expiry

NSE Nifty 50, Bank nifty
The strategy which we are suggesting for this weekly expiry dated 23rd June is a Moderately Bullish strategy

By Rajesh Palviya 

In Nifty current series there has been a Long Unwinding witnessed with decrease in price of -2.84% and decrease in OI by 7% as of Wednesday wherein there was unwinding of 7.69 lakh shares in OI, decreasing from 112.81 lakh to 105.12 lakh shares. Nifty current month rollover stands at 18% as of Wednesday, while Nifty Put Call Ratio, a sentiment indicator used by traders to gauge the market sentiment and mood, is currently at 0.75 compared to 1.28 of last week, indicating a flat-to-negative movement for expiry session.

India Vix, a market volatility indicator often called the fear gauge, is currently trading 22.36% compared to 19.14% of last week. Implied Volatility of Nifty ATM options for the current series is at 23.79% in contrast to 18.25% of last week, indicating lower Volatile movement on either side in expiry session. 

Nifty Call Options OI distribution shows that 15,800 has highest OI concentration followed by 15,900 & 16,000 which may act as resistance for current expiry and on the Put  front 15,500 followed by 15,600 & 15,700 witnessed significant OI concentration and may act as support for current expiry.

In weekly options there was Call writing seen at 16,000 strike followed by 15,900 & 15,800 while on the Put side noticeable activity of writing was witnessed in 15,700 ,15,500 & 15,600 strike prices. Options data suggest an immediate trading range between 15,400 and 16,000 levels.

Nifty Open Interest Concentration

Nifty Option OI Change

Nifty Bank Outlook

In current series there has been a Short Addition witnessed in Bank Nifty Fut with an decrease in price of -5% and increase in OI by 10% as on today wherein there was addition of 2.28 lakh shares in OI, increasing from 23.79 lakh to 26.07 lakh shares. Bank Nifty Current series rollover stands at 16% as of Wednesday, while Bank Nifty Put Call Ratio is currently at 0.71 compared to 0.92 of last week indicating flat-to-negative movement for expiry session.

Bank Nifty Put options OI distribution shows that 33,000 has highest OI concentration followed by 32,500 & 32,000 which may act as support for current expiry and on the Call front 34,000 followed by 34,500 & 35,000 witnessed significant OI concentration and may act as resistance.

In weekly options Call writing seen at 34,500, 34,000 & 35,000 strike while on the put side it was seen at 33,000 , 32,500 & 32,000 Options data indicated an immediate trading range between 32,800 and 34,000 levels.

Bank Nifty Open Interest Concentration

Bank Nifty Option OI Change

 

NSE Nifty 50 trading strategy for 23rd June F&O expiry

The strategy which we are suggesting for this weekly expiry dated 23rd June is a Moderately Bullish strategy called as CALL LADDER, which involves buying of one lot of Nifty 15,750 Call @ 199 & selling of one lot each of 16,000 Call @100 & one lot of 16,250 Call @ 40. The cost of the strategy involves outflow of Rs 2,950 which is the maximum loss if Nifty trades & remains below 15,800 levels on expiry. The maximum profit of Rs 9,550 will be attained above 16,000 levels, while strategy will start making loss if Nifty crosses 16,400, hence it’s advisable to exit the strategy in total to avoid unlimited losses above 16,400. Break Even points of the strategy are 16,441 on upside & 15,809 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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