NIFTY Options Trading by RAJ

[healthraj]

What is the calculation as per Options data , although you might have explained earlier but if once more, will be really grateful Raj ?
How you have arrived at 7975 from options data ?

Average of MAX OI and MAX COI

MAX COI at 7900-8000. MAX OI @ 7800-8200.
Take an Average of all the above 7900, 8000, 7800, 8200. IT should give you 7975. On a Particular day that should give you a Direction. Meaning NIFTY will trade towards the Pivot 7975. If it is broken then it will goto the next level in the MAX COI which is 7900-8000 in this case.

 

[rajesh_]

Today max coi is 7900-8300 as per ur excel. Above calculation is correct?

 

[singlap]

Thanks for sharing this Raj.
So ,in todays scenario, if 7975 is broken , it should go to 8000 which is Max COI .
Is it right ?
or
do we recalculate things if any of Max COI or Max OI changes and take average and then consider it as pivot ?

Also ,if 7975 is resistance , will 7975-60 will be support , as per this theory ?

 

[healthraj]

Today max coi is 7900-8300 as per ur excel. Above calculation is correct?

Yes you are right. I have modified the formula since we have to take the Absolute value. So as per the below formula the MAX COI was 7900-8000. In 8000CE there were 10L Calls squared off

So you can modify the sheet as follows.

Goto the hidden sheet SOData. 
In the Cell L3, Paste the formula without quotes "=IF(ABS(MAX($C$15:$C$200))>ABS(MIN($C$15:$C$200)), MAX($C$15:$C$200),MIN($C$15:$C$200))" 

In the Cell L4 Paste the formula without quotes "=IF(ABS(MAX($U$15:$U$200))>ABS(MIN($U$15:$U$200)), MAX($U$15:$U$200),MIN($U$15:$U$200))"

In M3, "=IF(ABS(MAX($B$15:$B$200))>ABS(MIN($B$15:$B$200)), MAX($B$15:$B$200),MIN($B$15:$B$200))"

In M4 "=IF(ABS(MAX($V$15:$V$200))>ABS(MIN($V$15:$V$200)), MAX($V$15:$V$200),MIN($V$15:$V$200))"

L3 and L4 are for MAX COI
M3 and M4 are for MAX OI

 

[healthraj]

Thanks for sharing this Raj.
So ,in todays scenario, if 7975 is broken , it should go to 8000 which is Max COI .
Is it right ?
or
do we recalculate things if any of Max COI or Max OI changes and take average and then consider it as pivot ?

Also ,if 7975 is resistance , will 7975-60 will be support , as per this theory ?

When NIFTY is Trading well below you can set 7975 as the Target. Today during day, it made low of 7910. So it was opportunity to Buy for 7975.

Yesterday MAX COI @ 7400-8000 MAX OI at 7800-8100. The Average was 7825. And NIFTY Made low of 7816 I think. So once again Yesterday the target was 7825.

But this logic cannot predict the direction, it can only give a initial direction. And 7975 being the Average is the Pivot and not Resistance or Support. The Support will MAX COI @ PE which 7900 and Resistance would be MAX COI @ CE which is 8000

You can also confirm the above before taking a trade by looking at the Charts.

 

[singlap]

Thanks Raj.

So, if market has touched 7975, we have following possibilities

a. Max COI or OI has also changed and hence average will change and accordingly market will try to move towards that pivot.

b. None of the points of Max COI or OI has changed and hence pivot is still 7975. Now, what will be the directional bias of market ? Towards Max COI (in this case 8000) or something else.

c. How can we conclude that it can reverse from 7975 ? Are we following the concept that it will oscillate plus minus 30 points from pivot unless the pivot changes.

 

[healthraj]

Thanks Raj.

So, if market has touched 7975, we have following possibilities

a. Max COI or OI has also changed and hence average will change and accordingly market will try to move towards that pivot.

b. None of the points of Max COI or OI has changed and hence pivot is still 7975. Now, what will be the directional bias of market ? Towards Max COI (in this case 8000) or something else.

c. How can we conclude that it can reverse from 7975 ? Are we following the concept that it will oscillate plus minus 30 points from pivot unless the pivot changes.

Basically you are asking how to Trade

I am assuming you want to Trade just by looking at the Options Chain data. Which is possible. So let us go step by step.

1. Let us assume you are a Day Trader.
2. You need an Entry and Targets to Exit.
3. By Looking at the MAX COI @ PE - You can find out the Support
4. By Looking at the MAX COI @ CE - You can find out the Resistance
5. By Taking the Average of MAX COI @ CE and PE, you get the Pivot.
6. If the Stock is Trading near the MAXCOIPE, you might want to Buy. Your Targets would Pivot and MAXOICE
7. If the Stock is Trading near the MAXCOICE, you might want to SELL. Your Targets would Pivot and MAXOIPE
8. What if you do not get entry near MAX OI @ CE or PE - Do not Trade.
9. By comparing the MAX OI @ CE and PE you will also get a sense of whether you BUYing or SELLing is Safe. In other words, your bias on whether you need to be Bullish or Bearish.
10. You can also look at the individual strikes to find out whether the market is Trending or Range bound.

Let us take today's example for NIFTY

3. By Looking at the MAX COI @ PE - 7900
4. By Looking at the MAX COI @ CE - 8000
5. By Taking the Average of MAX COI @ CE and PE, 7950.
6. If the Stock is Trading near the MAXCOIPE, you might want to Buy. Your Targets would Pivot and MAXOICE. NIFTY made low of 7906, which is near the support of 7900, So It is opportunity to Buy
9. By comparing the MAX OI @ CE and PE you will also get a sense of whether you BUYing or SELLing is Safe. In other words, your bias on whether you need to be Bullish or Bearish. - -12L @ CE is Less than 7L @ PE - So it is a BUY At 7900 - Bullish
10. You can also look at the individual strikes to find out whether the market is Trending or Range bound. Till 7900 it is Bullish and from 7950 it is Bearish, which tells that the Range is only 50-75 points and it is going to be a Rangebound market

So as per above, if one has bought at 7910, should have closed all the positions at 7950.

Note : In the above to calculate I have taken only MAX COI to calculate the pivot. One can also include MAX OI levels to get more accurate levels. Please remember the above strategy or logic is as per my observation. So it might not work when it is overly Bullish or Bearish.

 

[DSM]

Great work Sir. Respects to you. All I can say is : :clap::clap::clap:

Basically you are asking how to Trade

I am assuming you want to Trade just by looking at the Options Chain data. Which is possible. So let us go step by step.

1. Let us assume you are a Day Trader.
2. You need an Entry and Targets to Exit.
3. By Looking at the MAX COI @ PE - You can find out the Support
4. By Looking at the MAX COI @ CE - You can find out the Resistance
5. By Taking the Average of MAX COI @ CE and PE, you get the Pivot.
6. If the Stock is Trading near the MAXCOIPE, you might want to Buy. Your Targets would Pivot and MAXOICE
7. If the Stock is Trading near the MAXCOICE, you might want to SELL. Your Targets would Pivot and MAXOIPE
8. What if you do not get entry near MAX OI @ CE or PE - Do not Trade.
9. By comparing the MAX OI @ CE and PE you will also get a sense of whether you BUYing or SELLing is Safe. In other words, your bias on whether you need to be Bullish or Bearish.
10. You can also look at the individual strikes to find out whether the market is Trending or Range bound.

Let us take today's example for NIFTY

3. By Looking at the MAX COI @ PE - 7900
4. By Looking at the MAX COI @ CE - 8000
5. By Taking the Average of MAX COI @ CE and PE, 7950.
6. If the Stock is Trading near the MAXCOIPE, you might want to Buy. Your Targets would Pivot and MAXOICE. NIFTY made low of 7906, which is near the support of 7900, So It is opportunity to Buy
9. By comparing the MAX OI @ CE and PE you will also get a sense of whether you BUYing or SELLing is Safe. In other words, your bias on whether you need to be Bullish or Bearish. - -12L @ CE is Less than 7L @ PE - So it is a BUY At 7900 - Bullish
10. You can also look at the individual strikes to find out whether the market is Trending or Range bound. Till 7900 it is Bullish and from 7950 it is Bearish, which tells that the Range is only 50-75 points and it is going to be a Rangebound market

So as per above, if one has bought at 7910, should have closed all the positions at 7950.

Note : In the above to calculate I have taken only MAX COI to calculate the pivot. One can also include MAX OI levels to get more accurate levels. Please remember the above strategy or logic is as per my observation. So it might not work when it is overly Bullish or Bearish.

 

[rajesh_]

Yes you are right. I have modified the formula since we have to take the Absolute value. So as per the below formula the MAX COI was 7900-8000. In 8000CE there were 10L Calls squared off

So you can modify the sheet as follows.

Goto the hidden sheet SOData. 
In the Cell L3, Paste the formula without quotes "=IF(ABS(MAX($C$15:$C$200))>ABS(MIN($C$15:$C$200)), MAX($C$15:$C$200),MIN($C$15:$C$200))" 

In the Cell L4 Paste the formula without quotes "=IF(ABS(MAX($U$15:$U$200))>ABS(MIN($U$15:$U$200)), MAX($U$15:$U$200),MIN($U$15:$U$200))"

In M3, "=IF(ABS(MAX($B$15:$B$200))>ABS(MIN($B$15:$B$200)), MAX($B$15:$B$200),MIN($B$15:$B$200))"

In M4 "=IF(ABS(MAX($V$15:$V$200))>ABS(MIN($V$15:$V$200)), MAX($V$15:$V$200),MIN($V$15:$V$200))"

L3 and L4 are for MAX COI
M3 and M4 are for MAX OI

thanks raj.....your excel is my tool. Is there any other changes in the tool?

 

[healthraj]

09-OCT @ 3:20 PM.

INFY was flat today. No BIG Movement.

The 3400PE-4000CE is at 55. The VOLT has gone up Slightly.
It is better to SELL the MAX COI Pair 3300-3900 which is at 50.

3400-4000 Pair trading at 41 - A gain of 14 points

MAX OI and COI at 3700-4000 with Pivot at 3850. If it moves beyond 3850 then it can goto 4000. Otherwise if it touches 3700 it is a BUY

In the hourly charts the Resistance is at 3875. I think it is better to wait for confirmation on the down move to SELL.