Nifty Open Interest Analysis

[jamit_05]

Would like to commend OT on tracking Nifty Options so well for the following reasons:

1) He said in an uptrend if any CE makes OI > 70 L then the trend is near finished. It happened, since 6000 made OI>70L the bull trend completely stalled.

2) He said if an option liquidates more than 10% then the level is busted. It happened with 5900 and 5800 precisely that way

great work man.

Another friend Prada did a great of becoming bearish near 5970 !! Wonder how he did it?

 

[Option.Trader]

Date: 19.3.2013

They say, a picture says a thousand words... todays image is that... abs short build up in calls ( 63 L OI added in 5600-6000 Calls) and 93L liquidation in 5500-5900.... two writings showing short covering and short build up put it accurately

Further downside looks possible until atleast the near term double bottom formation of 5640... lets look at some trad able indicators
- 5400/5500 PE buying just two days back
- Yesterday short buildup on FII data
- Call getting capped at 5900/6000
- 25 bps getting factored in thursday rally

 

[jamit_05]

@ OT

Its pretty clear that Bears are In Bulls are Out. Then why is that the April month CEs are clearly more expensive than same strike price PEs? Does this indicates some strength in the forward month. Or is it that the writers prefer writing PEs since the assume trend is eventually always go in the upward direction sooner or later?

 

[SexyTrader]

@ OT

Its pretty clear that Bears are In Bulls are Out. Then why is that the April month CEs are clearly more expensive than same strike price PEs? Does this indicates some strength in the forward month. Or is it that the writers prefer writing PEs since the assume trend is eventually always go in the upward direction sooner or later?

Nope! The Bulls in India are not out yet

Watch the "circus" happening today & tomorrow....all premiums should start rising today :thumb:

 

[jamit_05]

Nf reached 5700, but 5700 PE OI fairly stable over 70 L; Should one expect a bounce then? Probably yes.

From our recently observations, for a round figure to break its PE OI should drastically cut down prior.

 

[Option.Trader]

Bulls seem to hold on to 5700pe, 9l added. Let's see end of day if it holds up

 

[jamit_05]

A strong upmove not ruled out... Japan 2% China 3% UP UP UP !!!

5700 added 10L OI today... pretty strong.

Today uplegs have vol, down legs only 10%

Lets see.

 

[anup]

Come on Bulls, show your strength... Holding calls ..Lets see

 

[Option.Trader]

Bulls seem to hold on to 5700pe, 9l added. Let's see end of day if it holds up

Things not looking good for Bulls... out of 9L, 3L have already left the battlefield... people are ditching the sinking ship fast... today if we dont have more than 12% addition in OI, things look ominous for Bulls...
Bears are smiling all the way... i remember seeing 5600PE at 5Re yesterday .. no guessing where you would be with just 25K of investment... need to find a way to trade these moves...

 

[jamit_05]

Come on Bulls, show your strength... Holding calls ..Lets see

Why CE Anup? Go with the trend. At a pullback buy PEs for easy returns.