Options Insights: NIFTY's Potential Trading Range

As we approach the penultimate day of the September derivative series monthly expiry, analyzing the recent Options activity in NIFTY on the trading session of September 26th can provide valuable insights for traders. To gain a clearer perspective, it’s essential to complement this data with the Historical Options data for the upcoming September 28th expiry.

On Tuesday, the 26th, Nifty exhibited intriguing options behavior. Notably, there was significant Out-of-The-Money (OTM) PUT writing at the 19600 and 19200 strikes, with modest PUT writing activities observed between these levels. Additionally, the highest increase in Call Open Interest (OI) occurred at the 19700 strike, while some Put unwinding took place at the same strike.

However, delving into the Historical OI Data for NIFTY reveals that the maximum CALL OI accumulation resides at the 19800 levels. This suggests that, for the time being, we can anticipate this level to serve as a substantial resistance point. Subsequently, the second-highest CALL OI accumulation emerges at the 20000 level, implying that the 19800 level must be comprehensively breached to pave the way for further upside potential.

On the downside, there is a near-identical concentration of PUT OI at the 19500 and 19600 strikes. This zone is expected to offer strong support for NIFTY.

In summation, the current Options Interest (OI) data hints at a probable trading range for NIFTY in the coming two days. Unless there is a significant shift in OI dynamics on either side, traders should anticipate a trading range between 19500 and 19800. It’s important to monitor these key levels closely and consider them in your trading strategies as the expiration date approaches.

Milan Vaishnav, CMT, MSTA
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