Today the Sensex week settles — expiry day — and by this afternoon every Sensex option either pays off or expires worthless. That's job one. The shadow behind it is the Reserve Bank's rate verdict tomorrow, which is why nobody wants to carry a big bet into the close. This episode is the data-driven plan for trading the expiry with one eye on the RBI.

Start with the Sensex, because it dies today. The range is 74000 to 75000 — the heaviest downside bets at 74000, the heaviest upside lid at 75000. The option market is pricing a roughly 650 point move (the straddle), and on expiry, price gets dragged toward the middle, around 74300 to 74500, where the most option buyers lose. One warning: Sensex option volatility crushes into the close, so buying them for direction in a quiet tape can cost you half your premium to time decay alone. On expiry, t ...