Nifty Open Interest Analysis

[jamit_05]

NF below 5700 and 5700 PE OI is still 95 L.

The sharp price fall from HOD to LOD, around 90 points, has not scared off the writers in 5700 PE.

5700 CE OI 50L << 5700 PE OI 95 L

This shows that LOD is going to hold. One more hour of trading to go.

 

[anup]

NF below 5700 and 5700 PE OI is still 95 L.

The sharp price fall from HOD to LOD, around 90 points, has not scared off the writers in 5700 PE.

5700 CE OI 50L << 5700 PE OI 95 L

This shows that LOD is going to hold. One more hour of trading to go.

Thanks for the update bro

:thumb::thumb:

 

[aditya14]

Just need to ask 1 question.......
OI addition of 50 in nifty(how do you figure that was buy order or sell order..... if you are guessing than the point of this thread is defeated)

Best Regards,
Aditya

 

[aditya14]

NF below 5700 and 5700 PE OI is still 95 L.

The sharp price fall from HOD to LOD, around 90 points, has not scared off the writers in 5700 PE.

5700 CE OI 50L << 5700 PE OI 95 L

This shows that LOD is going to hold. One more hour of trading to go.

Who told you those guys were writers and not buyers?

 

[Option.Trader]

Here's a picture to clear a few things from OI

Price action is an important indicator to determine accumulation or writing
ACCUMULATION
If OPEN INTEREST increases and the price also increase, it suggests that accumulation is taking place.

WRITING
If OPEN INTEREST increases and the price decreases, it suggests that writing has been done.

As writers play with limited profit and unlimited loss potential, they have a larger stake... so a higher OI at any level indicates more conviction by those traders that price wouldnt go above those levels...
So a call writer is a bearish player and Put writer is bullish

Hope this clears things up and we can move onto trading

 

[spkreddy]

dear OT ji, can you provide the excelsheet for downlaod ? i have been waiting for file

 

[knarendra]

NF below 5700 and 5700 PE OI is still 95 L.

The sharp price fall from HOD to LOD, around 90 points, has not scared off the writers in 5700 PE.

5700 CE OI 50L << 5700 PE OI 95 L

This shows that LOD is going to hold. One more hour of trading to go.

Hai,
What is the expansion for HOD & LOD ?

 

[TraderRavi]

Hai,
What is the expansion for HOD & LOD ?

high of the day ..........low of the day.......

 

[prabhsingh]

Here's a picture to clear a few things from OI

Price action is an important indicator to determine accumulation or writing
ACCUMULATION
If OPEN INTEREST increases and the price also increase, it suggests that accumulation is taking place.

WRITING
If OPEN INTEREST increases and the price decreases, it suggests that writing has been done.

As writers play with limited profit and unlimited loss potential, they have a larger stake... so a higher OI at any level indicates more conviction by those traders that price wouldnt go above those levels...
So a call writer is a bearish player and Put writer is bullish

Hope this clears things up and we can move onto trading

Many times FII also make use of Option Buying for Hedging their positions that they have taken in Cash Markets so as to mitigate the losses.Hence coupe of times OI can also have mixture of writing+buying.If it would have so easy to determine whether its writing or buying then money making wont be that much tedious job in markets.

 

[jamit_05]

Who told you those guys were writers and not buyers?

Am with the following assumptions:

1) Options writers are more eager sellers when selling with the trend. If trend is down, they are very eager CE sellers.

2) They are also more eager buyers when things go wrong. They are quick to cut losses when trend reverses.

In other words, options is a writers market. Just like OT said, since sellers have unlimited loss at stake they are more eager to act than buyers.

All action could be seen accordingly. For ex. today at closing the 5700 PE held a fairly strong positions since OI was comfortably above 70L. That means writers are confident that price will come back above 5700 before expiry.