General Trading Chat

[ap*]

I trade in a similar style as you.How do you use options chains.What data you find most interesting?i mostly look at IV for reversal confirmation and OI addition for continuation.for ex today morning OI showed little addition on put side and IV were also not high for calls so bullish move was big suspect.

Spot on with how i look at the option chain.

These are the basic things i look for-

1)Iv of options 2% above current and below present nifty strike price. ( to check breakout or down )
2) addition of oi on dropping prices for ex if theres an oi addition of more than 10% on a put or call while the prices are declining its bearish for me and versa.

In short to give a better example lets look at nifty 7800 ce for today at market close. It has added almost 20% new oi on a day when it has lost 20% value. So i consider this bearish. Same for 8000 ce i saw oi being added in the morning in huge quantity again on declining prices.

So in my views 8000 call for this month is being sold. In my experience most of the time option writers move the market to their best benifit. With 8000 call being written in such huge quantity lots of money will be lost if nifty went there. The people who loose this money arent retailers ( mostly ) calls and puts are written by institutions ( majority ) so id always be on the side of the bigger money.

 

[Smart_trade]

one quick query option traders-

If Nifty Future is trading at 7870,I generally buy nearest CE,which is here 7850CE.
and if NF is at 7920,I select 7950PE.

am I doing it wrong? I see may traders select whole number like 7800,7900,8000.
Whats the reason behind that?

my purpose of doing CE-PE is to catch quick 5-10 points moves,dats all I want.

reply karo bhai,overlook na karo.

Whole numbers contracts ( like 7800,7900 etc) have better liquidity and depth than 7850,7950 etc. That is why traders prefer to trade in these contracts.

Smart_trade

 

[ap*]

ap bro, if u dont mind can u open a new thread and post all your views.

Sir i had opened one such trade where i posted levels by mistake and it got deleted. Ever since i have gotten comfortable here in the chat thread. Will open one as soon as start trading stocks which is by this month end.

As of now my only view is that Nifty has closed on a bearish note. We should be visiting 7600 next on our way down. In my humble opinion we are due a major drop maybe to 6500-6600 levels in the next 3 months. Unless 7600 is protected this series. If it is then id be super bullish. Or else we are up for long move lower. I will be taking this each day as it comes. But overall my bias is bearish till we cross 7970 this month and below 7600 this series id expect 6600 as an eventuality only.

 

[vivektrader]

Spot on with how i look at the option chain.

These are the basic things i look for-

1)Iv of options 2% above current and below present nifty strike price. ( to check breakout or down )
2) addition of oi on dropping prices for ex if theres an oi addition of more than 10% on a put or call while the prices are declining its bearish for me and versa.

In short to give a better example lets look at nifty 7800 ce for today at market close. It has added almost 20% new oi on a day when it has lost 20% value. So i consider this bearish. Same for 8000 ce i saw oi being added in the morning in huge quantity again on declining prices.

So in my views 8000 call for this month is being sold. In my experience most of the time option writers move the market to their best benifit. With 8000 call being written in such huge quantity lots of money will be lost if nifty went there. The people who loose this money arent retailers ( mostly ) calls and puts are written by institutions ( majority ) so id always be on the side of the bigger money.

Didn't understand your point no.1, can you frame it taking today's example.

 

[wabuf]

filled order sell 1500 of tvsmotor in intraday @ 14.14 .. it said quantity is more than top 5 bidder and after that it fell 40RS ... feeling really sad today .. did this happened to anyone today ??

 

[manish9300]

Manish bhai, please you also explain your option chain analysis in detail.

yea sure,
For reversal trade i look at IV of in the money call and put options.IV tells how an option is 'priced'.Higher IV for in the money calls than puts is bullish and higher IV for in the money puts than calls is bearish.A sudden change in this dynamic signals an impending reversal of trend.It is very reliable indicator as per my experience.

For trend continuation i look for good addition in OI for in the money puts in case of bull trend and good OI addition for in the money calls in case of bear trend.Higher addition means stronger the move.


Above is how i use options chains .Would like to know how others view/use option chain data.

 

[vivektrader]

Do you see this before an impending breakout or after. Also where do you watch option chain, on NSE website?

 

[manish9300]

Spot on with how i look at the option chain.

These are the basic things i look for-

1)Iv of options 2% above current and below present nifty strike price. ( to check breakout or down )
2) addition of oi on dropping prices for ex if theres an oi addition of more than 10% on a put or call while the prices are declining its bearish for me and versa.

In short to give a better example lets look at nifty 7800 ce for today at market close. It has added almost 20% new oi on a day when it has lost 20% value. So i consider this bearish. Same for 8000 ce i saw oi being added in the morning in huge quantity again on declining prices.

So in my views 8000 call for this month is being sold. In my experience most of the time option writers move the market to their best benifit. With 8000 call being written in such huge quantity lots of money will be lost if nifty went there. The people who loose this money arent retailers ( mostly ) calls and puts are written by institutions ( majority ) so id always be on the side of the bigger money.

i mostly look at in the money options.I think out of money is used heavily for hedging purpose by Fii and Dii and by retail for taking big bets.OI data is telling a monthly range of 8000-7500 or 8200-7700.

 

[ap*]

Didn't understand your point no.1, can you frame it taking today's example.

In todays view i was looking at 8000ce/ pe and and 7600 ce /pe. I was looking at changes in the iv going higher for the put when it wasnt for the same strike call is a sign of bias in that zone.

 

[manish9300]

Do you see this before an impending breakout or after. Also where do you watch option chain, on NSE website?

Before BO....mostly.i watch Nse options chain.