Trade with options data

[kiranjakka]

do you want to say that..........if open intrest of put decreases then stock is bullish........and if open intrest of call decreases....stock is bearish...........................am i missing something.....please be precise.

puts and calls in the market are created by call writers and put writers

1.call writers write the call options and sell them in the open market with the intention that a stock price cannot move beyond a level and sell them at a particular price -- so if they see that the price of stock moving beyond a point they just want to cover up the open positions and close the contract and thus the oi decreases
so call writers are considered as generally having a bearish view

2.put writers write the put options with the intention that the stock price wont fall further down and then sell a particular contract at a strike price in open market so if the value of the stock is falling down they tend to cover up their open positions otherwise they will be in loss

so put writers considered to be having a bullish view


hope this solves u r doubts

 

[rananjay00007]

yes............i got it..............very well explained.........thanks.............

 

[SriVijay]

puts and calls in the market are created by call writers and put writers

1.call writers write the call options and sell them in the open market with the intention that a stock price cannot move beyond a level and sell them at a particular price -- so if they see that the price of stock moving beyond a point they just want to cover up the open positions and close the contract and thus the oi decreases
so call writers are considered as generally having a bearish view

2.put writers write the put options with the intention that the stock price wont fall further down and then sell a particular contract at a strike price in open market so if the value of the stock is falling down they tend to cover up their open positions otherwise they will be in loss

so put writers considered to be having a bullish view


hope this solves u r doubts

I think the view has been misplaced bullish with bearish and vice versa

 

[rananjay00007]

.............................

 

[DanPickUp]

I think the view has been misplaced bullish with bearish and vice versa

No.

Writing means selling means I am short a call or a put.

If I sell a call, I want market move down = Bearish

Why?

I sell for example the call with a price of 50.

If market moves down, the call loses value if time and vola is not my enemy.

I then buy back the call for a cheaper price, let's say 25.

The different from the price of 50 to 25 is my profit or when used as a hedge against the stock, my loss should be covered if I toke itm or at least atm calls.

If I sell a put, I want market move up = Bullish

The whole story now vice versa.

DanPickUp

 

[kiranjakka]

No.

Writing means selling means I am short a call or a put.

If I sell a call, I want market move down = Bearish

Why?

I sell for example the call with a price of 50.

If market moves down, the call loses value if time and vola is not my enemy.

I then buy back the call for a cheaper price, let's say 25.

The different from the price of 50 to 25 is my profit or when used as a hedge against the stock, my loss should be covered if I toke itm or at least atm calls.

If I sell a put, I want market move up = Bullish

The whole story now vice versa.

DanPickUp

right said

 

[sagay]

right said

Thanks Kiran ! This is nice thread keep going

 

[kiranjakka]

Thanks Kiran ! This is nice thread keep going

you will just get confused in the initial stages later you will love interpreting the data

 

[rananjay00007]

so whats hot for monday

 

[kiranjakka]

so whats hot for monday

i have missed to post two options data for monday that was reliance on bullish view and bharti for bearish view as today market is open i wasnt able to find the yesterdays data which is important