Expiry gaps down onto the cushion. 73,500 decides

That is the hiding. Money spent Wednesday rotating into the most defensive corners of the market while the index stayed flat. And the intraday shape tells you who is in charge. We rallied to 23,425 by two o'clock, the Sensex had almost touched 74,613, and then the last 90 minutes got sold straight into the close. The fresh options data explains it. While we rallied, the call sellers were stacking the ceiling at 23,300, 23,400 and 23,500. They added nearly 80 lakh contracts in one day.

23,400 alone now holds 60 lakh contracts, the biggest single build-up on the Nifty option chain. The market walked into that resistance at 23,425 and the sellers slammed the window shut. Now the twist I promised you yesterday. Did the FII desks finally cover the mountain short, or did they blink? Out of 2,77,000 contracts net short on index, they covered about 5,000. Less than 2%. Day 4, still holding 2,72,000 short index futures, still loaded with protective puts and still selling those calls. Three legs all pointing towards a down move, and they haven't changed their stance.

And they sold another 1,919 crore of cash on top of that. Against them, the DIIs bought 2,950 crore of cash. And the Pros, the proprietary desk, the smartest money in the room, halved their futures longs from twenty-two thousand to twelve thousand, but still twelve thousand futures contracts are long. And they have bought options on both the ends, calls as well as puts, meaning they get paid if the market moves big either way. They just stopped betting on which direction the market would move.

And the retail clients, they are on the opposite side. 7 lakh puts. Hold that number in your head until I give you the downside level. So, here is the expiry day prep today. The pre-market screen slid from 23,112 to about 23,043 in half an hour this morning, pointing to a Nifty open nearly towards that 23,000 strike, 23,050 is where we should open, and Sensex opens around 73,450 to 73,500. Now pulling up the expiry chain. 73,500 holds nearly 16 lakh puts, and the writers have added over 8 lakh of those just yesterday.

That is the cushion, and we are opening right on top of it. The resistance has moved up: 74,500 holds 18 lakh contracts and 75,000 holds around 23 lakh contracts. And below 73,500 is 73,000, which holds nearly 19 lakh puts, almost 10 lakh added in a single session. Read that again. Somebody spent Wednesday buying insurance 1,000 points below the close. So 73,000 strike is what we are looking for. One more level, guys, the most important one. The gamma flip level, or the switch level: 73,900.

In plain words, above that level the option machinery absorbs moves and drags price towards that 74,000 magnet. Below it, the same machinery speeds up the move instead of slowing it down. We are opening below that level. That is exactly what makes today extremely dangerous. So the plan is twofold, guys. The first is, what we are going to do is watch for 30 minutes after the market opens. If 73,500 holds the opening test and we reclaim 73,600, then 73,900 plays inside that window, the day flips back to the magnet mode and the drift goes home towards 74,000 into the close.

That is where premium sellers eat that 74,000 straddle out. If 73,500 breaks and stays broken for half an hour, do not try to defend it. The trapdoor is open and 73,000 would come extremely fast. 7 lakh written puts start burning. On Nifty, it is the same logic. So, 23,000 carries 46 lakh puts, the foundation of the whole structure, and I expect it to hold for the first test. Only back above 23,200 does the old range resume. The resistance is at 23,300 and 23,500, that is the range we are talking about, which is freshly cemented, so sell on rise continues.

And the long trades only start above 74,000 on Sensex and 23,200 on Nifty. Below those, rallies are for selling and not for chasing. Now today's lesson, guys, because it is the opposite of yesterday. Yesterday volatility had crushed and I told you to sell the calm. This morning the expiry option price is rising, not falling. The ATM straddle is trading around 556 points on Sensex and its IV jumped nearly 8% into the close. The market is paying up for protection on expiry, which it almost never does when it expects a quiet pin.

So do not sell premium blindly at the open. A gap through your strike on expiry day can take away in one hour what you collected in weeks. Let the first half pick the side. If the cushion holds, the second half of the day is where the pin trade and the premium selling should happen. This morning, patience is the key, guys. So the honest risk sits outside our chain as well. Crude is creeping back. Iran war tensions are back again. 25 this morning, up more than a percent, the ceasefire discount leaking out drop by drop.

27 for now. But if Brent pushes through 96, the whole bank-led story from Tuesday reverses, and no support level argues with oil. That is the gate I am watching before the levels pan in today. So the day in one breath, guys. Expiry gaps down onto the cushion. 73,500 holds and 73,900 gets reclaimed extremely fast, we drift home near 74,000 and the sellers win again. 73,500 breaks down for the first 30 minutes, 73,000 is where we are heading. Nifty floor is 23,000 and the resistance is 23,200.

The cap is at 23,400. The FIIs covered just 2% and kept 98% of their short position. Call it the 73,500 decision line. Trade that level, not the opinion. So this is The Tanmay Edge, guys. If this helped you see the tape more clearly, share it with one trader friend who needs it right now. Hit subscribe so you never miss a podcast update every morning. com and on Apple Podcasts, Spotify, every trading morning at 8:30. And leave me a rating, guys, I read every single one of them.

I am waiting for your reviews. Have a happy trading expiry, and see you all once again tomorrow.