Nifty Open Interest Analysis

[sridhar]

Today the option table is completely confusing. Attaching some OI & OI-change charts from excel.

http://www.traderji.com/attachment.php?attachmentid=18761&stc=1&d=13662
http://www.traderji.com/attachment.php?attachmentid=18762&stc=1&d=136626869168691

In particular how does one interpret 5700CE loosing 0.5million OI & 5700PE adding 2million OI?
MY reading:-

Bulls are confident of around 5660 holding.

Bears do not seem confident of 5743 holding - is it
a) insignificant change
or
b) end of series rollover to May? (may 5700Ce has added 0.6 million so I am thinking of this)

 

[Option.Trader]

Today the option table is completely confusing.

In particular how does one interpret 5700CE loosing 0.5million OI & 5700PE adding 2million OI?
MY reading:-

Bulls are confident of around 5660 holding.

Bears do not seem confident of 5743 holding - is it
a) insignificant change
or
b) end of series rollover to May? (may 5700Ce has added 0.6 million so I am thinking of this)

You are right. Short term Outlook is positive, I think it will hold good for this series seeing 5700pe going up to 80.for bears RR is more attractive in may series with Rbi rate cut out of way. But looks like if it falls this time, it may test 5100.

 

[Option.Trader]

You are right. Short term Outlook is positive, I think it will hold good for this series seeing 5700pe going up to 80.for bears RR is more attractive in may series with Rbi rate cut out of way. But looks like if it falls this time, it may test 5100.

Let's keep posting trade able ideas to make most of market conditions
I'm looking to short above 5755

 

[sridhar]

You are right. Short term Outlook is positive, I think it will hold good for this series seeing 5700pe going up to 80.for bears RR is more attractive in may series with Rbi rate cut out of way. But looks like if it falls this time, it may test 5100.

U mean 5700ce going to 80?

 

[sridhar]

I am looking into taking a trial position in May series.(More to clarify my understanding of how the option table works out)
My plan :-
BUY 5000PE 1 lot
BUY 6200CE 1 lot
Once trend of market is confirmed add to corresponding options & square off the other.
Does it make sense?

 

[nac]

You can very well take this strategy. You won't get hurt even if it goes against you...

 

[doctorshah]

Sridhar I think the options are quite OTM so I wont advice

 

[shivan]

Sridhar....as far as my little knowledge about option tell me.....options should be bought only when trend in market is confirmed......other wise time decay eat them up.

 

[Option.Trader]

I am looking into taking a trial position in May series.(More to clarify my understanding of how the option table works out)
My plan :-
BUY 5000PE 1 lot
BUY 6200CE 1 lot
Once trend of market is confirmed add to corresponding options & square off the other.
Does it make sense?

Too out of money with lots of time premium, ideally look to sell them

 

[sridhar]

Sridhar I think the options are quite OTM so I wont advice

Actually I plan to take it more like a multi-day positional trade. I anticipate that the change in Deltas as the market moves will give a slightly loaded benefit.

Have take May5200PE @ 9.7 & May 6200CE @ 6.2
Let us see how it works.

I had done a paper trade for 5700CE from 15/4 to date. Moved from my level of 16.5 to ~ 70. I only need to work out what stop loss calculations to use. One thing is for sure - no Stop Loss order in the system. Place lines in your charts. Only am a bit jittery about carrying forward over weekends.

Considering I am targeting max 100% monthly return in Options trading such positional positions seem to make more sense.
My system is theoretically giving these 100% returns in 15 min time frame - but invariably I tend to panic at times. So I need more space & time to fully understand how the Options market works. Then I will be relatively free to study Fundamentals for equity investing.