Analysis of Nifty 50 Option Chain data before the expiry of June 5, 2025 shows that the market is currently on a crucial turn. The drastic change in the OPEN INTEREST (OI), not only indicates the boom, but also pointed to a possible short cover rally.
Speaking of the first 24,800 strike price call option, it has a tremendous OPEN INTEREST of 79.74 lakh, with an increase of 96.25%compared to the previous session. This level is also an ATM (AT the Money) for Nifty. The boom in OI clearly shows that Call Writer is trying to stop the market at this level, or even the big traders have become active here. If the Nifty crosses this level, short cover can lead to a high rise.
The 25,000 CE also saw a strong OI of 77.23 lakh, with an increase of 39%. This shows that this level also has the possibility of trading activity and short cover. 25,000 is also a psychological level, which will show the strength of the market.
24,800 PE has an OI of 51.10 lakh, with an increase of 46.47%. This shows that PUT writers are less likely to be reduced below this level. At the same time, there are 18.75 lakh OI in 24,750 PEs, with an aggressive increase of 91.66%. This makes it clear that a strong support is being raised towards the bottom of the market.
The PCR is currently at 0.59, which is usually a sign of a mild recession. But when this level is very low, it also often hints at the potential ‘reversal point’ of the market. At such a time, the market can suddenly go up due to short cover.
Max Pain is currently at 24,800, while the current closing of Nifty is around 24,736.65. That means the market is closed below Max Pain, but the difference is not a lot. Despite this, this can be a good opportunity for the upper move.
OI Data, PCR and Max Pain – Together with all three signals showing that the market is currently in a ‘short covering zone’. If the Nifty lasts for 15 minutes above 24,800, it can easily go from 24,950 to 25,050. In this view, Call Option (CE) can be a good opportunity for buyers to boom on June 2. (Note: The information provided here is provided only for the purpose of information, it is important to mention here that the investment in the market is subject to the risks of the market. So always consult an expert before investing.)
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