Nifty Open Interest Analysis
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Date: 22.3.2013
Thought for the day : Trading with emotions leads to loose motions
We are so hooked on to things going up, that at the slightest instance we turn bullish... thanks to derivatives, we can make money on both sides, so no point in trying to hope for market to go up.. so many calls of 5620 /30 being low and initiating buying for targets of 5780...well with markets there is a possibility... but the probability of downside being much higher, prudent would be to sell into rallies if not in position... 2 days markets gave opportunities to enter... and if you see the trade, thats what FII's have done.. esp on Futures side
Another theory i have seen is that, if OI are built up on both sides, FII's somehow manage to expire within that range...as 5700 though it unwound 9%, still looks to hold... so would not be surprised if nifty holds 5700 this series and then we continue with carnage next week... well bring it on i say... we like swings.. thats when we make money
Tuesday would be last day of posting for this series.. have done one full expiry, hope ppl would have found it useful...
Thought for the day : Trading with emotions leads to loose motions
We are so hooked on to things going up, that at the slightest instance we turn bullish... thanks to derivatives, we can make money on both sides, so no point in trying to hope for market to go up.. so many calls of 5620 /30 being low and initiating buying for targets of 5780...well with markets there is a possibility... but the probability of downside being much higher, prudent would be to sell into rallies if not in position... 2 days markets gave opportunities to enter... and if you see the trade, thats what FII's have done.. esp on Futures side
Another theory i have seen is that, if OI are built up on both sides, FII's somehow manage to expire within that range...as 5700 though it unwound 9%, still looks to hold... so would not be surprised if nifty holds 5700 this series and then we continue with carnage next week... well bring it on i say... we like swings.. thats when we make money
Tuesday would be last day of posting for this series.. have done one full expiry, hope ppl would have found it useful...
Can't say anything about ease of money making but can surely add my two cents on "writing or buying".
Every time an option is written a fresh contract gets added so OI has to go up.
An option may be bought from a writer (OI going up) or from an earlier buyer (OI remains same) or it can be bought back by the writer (OI going down as the contract is extinguished).
So it is safe to say that if OI is going up - it is writing and if OI is going down it is buying. I am afraid that money making still remains difficult.
regards.
rm
Every time an option is written a fresh contract gets added so OI has to go up.
An option may be bought from a writer (OI going up) or from an earlier buyer (OI remains same) or it can be bought back by the writer (OI going down as the contract is extinguished).
So it is safe to say that if OI is going up - it is writing and if OI is going down it is buying. I am afraid that money making still remains difficult.
regards.
rm
The simple fact is I have seen how the OI is analysed and it is done through very expensive software and tracking each contract and price action.This is a ludicrous thread tbh and newbies are too gullible to believe this crap.
But frankly nobody here at TJ trades so it makes no real difference everybody`s a paper champion.
Reminds me of a story often told... people will only respect opinions when they pay for it.... anything for free and you have doubts being raised...well there is a simple enough answer to above boarders thoughts.. stop following the thread if it isnt useful.. you could save some money on bandwidth which you can use to buy the expensive software to get your kick :lol:
Date: 24.3.2013
Trading is a bit like Nostradamus Prophecies... they fit nicely after the event has happened. We still try to make sense of things.
There are a plethora of indicators... which should we choose at what time is a situation which will most probably lead to analysis paralysis.. So we try and combine two to raise the probability of the event.
We agree that the overall trend is down, but at certain point of time exhaustion sets in and there is nothing more to sell... so we see a pull back... thats what this weeks chart with Bollinger indicates... the number of times it has bounced back after touching the lower end indicates that a bounce back may be on cards. Together with OI where the built up in 5600 and 5700 is still healthy points to 5600 being protected. What does this mean... we look to book 50-60% of our profits in Shorts.. esp if they have doubled and let the free one's ride it out
Trading is a bit like Nostradamus Prophecies... they fit nicely after the event has happened. We still try to make sense of things.
There are a plethora of indicators... which should we choose at what time is a situation which will most probably lead to analysis paralysis.. So we try and combine two to raise the probability of the event.
We agree that the overall trend is down, but at certain point of time exhaustion sets in and there is nothing more to sell... so we see a pull back... thats what this weeks chart with Bollinger indicates... the number of times it has bounced back after touching the lower end indicates that a bounce back may be on cards. Together with OI where the built up in 5600 and 5700 is still healthy points to 5600 being protected. What does this mean... we look to book 50-60% of our profits in Shorts.. esp if they have doubled and let the free one's ride it out
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