Bond yields rally. One day to Sensex expiry

That is Thursday's mover for Indian IT. 51, slipping two thirds of a percent. 36. Gold is trading flat at 4,485 dollars per ounce. 62. The central bank stepped in there and some relief was seen. 36. Now let's look at the desks, what they did yesterday. On Monday FIIs flipped to buyer with 2,813 crore of cash buying. On Tuesday they sold again and back to basics, 2,457 crore back out of the door. So that flip lasted only one day. The buyer didn't stay.

The cumulative number still stands at 54,151 crores for the year so far. But domestic desk did something interesting. DIIs came in with 3,802 crore on Tuesday. So when FIIs sold, DIIs bought the dip cleanly. Combined cash flow was actually positive by 1,344 crore for yesterday. Two desks, different views. Net result, Nifty barely moved, closed 23,618 down 31 points. The professional desk did something I want to flag out. On Monday they were long both calls and puts at the same time. A textbook bet on movement, no direction.

On Tuesday, expiry day, they booked the call leg. 48 lakh net long calls came off the table. They kept the puts. Added more puts actually, 16,000 contracts more they have added. Held the long futures stack at 31,000 contracts. So here is what it means in plain language. Long futures plus long puts is the same shape as a long call. The put is paying for the downside protection on the futures bet. Net delta near zero, payout convex either way. Translation, the professional desk is paying for movement again, no side they are picking up.

Foreigners on the derivative side stayed bearish. 16 lakh contracts. 27 lakh. 05 lakhs. Three way they are bearishly stacked. And the crowd, the retail clients, went the other direction. 24 lakh, flipped from short Monday. 55 lakh. And they kept writing puts as well. 5 lakh contracts. When the crowd is this one sided, the market is going to punish them badly and that day is today. Now the part that matters today. Sensex closed at 75,200. Tomorrow is Sensex weekly expiry. One trading day for settlement.

The at the money strike is 75,200. The straddle at the money is trading around 870 rupees. 17 percent. Here is the asymmetry. The math behind options is not symmetric around this exact strike. Pull up the 75,200 row and the total options gamma number. It sits at plus 31. One strike below at 75,000, it's minus 321. Two strikes below at 74,500, it's minus 765. What does that mean in plain language? Below 75,200, moves get accelerated, dips get bigger, bounces snap back harder.

Above it moves get pulled towards the next big option writer level at 75,500 where there are over 10 lakh open calls present. Above the line you get pinning. Below you get fireworks. And today we are going to see some fireworks happening in Sensex as well. Sensex sits exactly on this line right now. For Nifty picture this. 23,500 put has the biggest open position, almost 5 million contracts. That is the floor or this support that was present. 96 million. That is the ceiling or the resistance.

23,600 was the magnet in between them. One more thing and this is the tell. 8 million contracts yesterday. Institutions are paying for the downside protection right at the ceiling. They are not picking direction. They are hedging sides. So sectorial tape. IT is leading. 23 percent. TCS, Infosys, HCL Tech, Tech M, all green. The Nvidia overhang is being priced in. 33. Pharma defensive bid is also holding. 43. 74. HDFC Bank, ICICI Bank dragged. Bank Nifty broke 53,500 which it has been defending for the last two weeks.

Metals were flat, FMCG was flat. The screener tape shows the IT basket, chemicals and mid cap select all as a Strong Buy. Crypto continues to bleed. Bitcoin is under 77,000. Ethereum at 2,100. 814 million dollars in liquidation we have seen in cryptos in the last 24 hours. The risk asset that bleeds first is usually the one that warns first. And here's the take guys. Two things that matter today. Bond yields are climbing everywhere. That is a slow leak on foreign equity money.

And it explains why one day buying doesn't stick. And Sensex sits exactly on that math line one day before expiry. When spot sits on that line, you do not pick a side. You buy options because their premium is cheap relative to the movement that is incoming. You play for the movement either way. Below the line, ride the dip down. Above the line, ride the bounce back to the middle. When the move stretches, sell the stretched premium. When the move pins, buy it back.

The keyword is hedge. If you are long futures, hedge it with a put. If you are short futures, hedge it with a call. The professional desk did this yesterday. Long futures plus long puts. Same shape as a long call. They paid for movement, not direction. We are going to do the same thing. 23% CAGR. 15% over Nifty. Next rebalance is on 26th May. com. Free, no login required. That is the read for Wednesday guys, 20th May. One day to expiry. Bond yields rising globally.

Spot on the math line. Trade the movement, not the direction. If you are listening on Apple, Spotify or YouTube, thank you for being there. If this helped you, please subscribe and rate it as well. It helps other traders to find the show. com. Two trades, one magnet, no side picking. This is The Tanmay Edge. You just got earlier guys. See you all once again tomorrow.