Nifty Open Interest Analysis

[shivan]

posting again (posted yesterday)
From the beginning of the series 6000 pe saw 400% increase in OI and 6100 pe saw 294% increase in OI even though their net OI is 57 lakh and 16 lakh respectively so what does this mean/indicate.....kindly tell.

 

[sridhar]

posting again (posted yesterday)
From the beginning of the series 6000 pe saw 400% increase in OI and 6100 pe saw 294% increase in OI even though their net OI is 57 lakh and 16 lakh respectively so what does this mean/indicate.....kindly tell.

Difficult to work out as it may be people hedging some other bets. Only absolute OI gives a clearer picture.

 

[baludalal]

please look at option movements in a particular strike for eg; 6100 puts ;during day time
Watch every 15 minutes . see also its counterpart's movments in 6200 call.if there is difference in OI increase (that is if 6 lakhs increasein puts and only 1 or 2 in calls, in hours time you can see nifty moving up (bullish) likewise towards end of the day between 15.00 hrs to 15.30 track the movement. it will tell about tomorrow's movement of nifty during opening hours. I have watched and found this way to track nifty is working fine

 

[DanPickUp]

It only seems, but there isn't any advantage in taking up options, selling or buying. To trade a trend Futures are best suited.

It may only seem that options require less money, but that is because it has lower delta than NF. Lower delta means lower returns also.

It may seem that the risk is less, but that is because the return is also less. When spot moves 100 points, an ATM option only moves from 100 to 150 (0.50 delta).

From Trend Trading perspective, options do not fare well. They are instruments for hedging stock portfolio or futures positions.

@Jamit

That comment is wrong. You can trade very well any trend with options. Only problem in your market: Margins, as such strategies include going short as well as long.

I posted a question in an other thread about that. Question was how to even make the profit higher from a long call when not taking it from the table, but until now nobody posted the right answer. What does it mean? People do not know about such strategies as they are not published in dept any where.

Take care / DanPickUp

 

[jamit_05]

@Jamit

That comment is wrong. You can trade very well any trend with options. Only problem in your market: Margins, as such strategies include going short as well as long.

I posted a question in an other thread about that. Question was how to even make the profit higher from a long call when not taking it from the table, but until now nobody posted the right answer. What does it mean? People do not know about such strategies as they are not published in dept any where.

Take care / DanPickUp

Let me clarify.

Consider the following scenario for both NF and Options:

If there is a 300 point move which is not strong... but normal... taking about a month to complete and Stop loss is about 30 points...

Then, if I be asked, "Which instrument is best suited for trading this move?"
My answer would be, NF.

Now one may argue that Options strategy can be designed to trade such a 300 point move to extract more than what NFs can, while keeping the Risk constant, then I would ask for proof.

You are probably right in saying that TJ has no successful thread which deals with Option Strategies live.

There was one thread, but a very long time ago. It was run by wastej. It dealt with managing delta neutral positions. It seemed logical.

 

[Option.Trader]

5900 put still holding up. 5800 put above 90 L. Is yesterday fall just technical? Not much delivery based selling. What I would do, Take 6000 call @ current with stop loss being immediate Nifty support of 5970 being held up till eod

 

[jamit_05]

Hi OT,

5800 has a huge OI of 91L; the majority believes it to be failsafe.

I have observed that when a SP reaches an extreme level of OI it gets challenged before the expiry. Consider it as an "overbought" level.

The weak hands ought to be shaken out. None should be permitted to make easy money.

 

[Raghuveer]

SP = ?
(??Settlement Price)
new to options jargon

Hi OT,

5800 has a huge OI of 91L; the majority believes it to be failsafe.

I have observed that when a SP reaches an extreme level of OI it gets challenged before the expiry. Consider it as an "overbought" level.

The weak hands ought to be shaken out. None should be permitted to make easy money.

 

[R M]

SP = ?
(??Settlement Price)
new to options jargon

SP = Strike Price

 

[Option.Trader]

Hi OT,

5800 has a huge OI of 91L; the majority believes it to be failsafe.

I have observed that when a SP reaches an extreme level of OI it gets challenged before the expiry. Consider it as an "overbought" level.

The weak hands ought to be shaken out. None should be permitted to make easy money.

Well if 5800 does crack, then its a clear indication of trend turning negative... you can pile up the shorts... at least Options data are not giving an indication of nifty turning bearish yet.. I would look at Nifty holding 5970 as it did today to go long... final support near 5900