NIFTY Options Trading by RAJ

[jamit_05]

Hello Jamit brother, Healthraj bro

Can you please clarify few of my doubts ??

Regards
Taiki

I got this concept from OT... whenever an OI for a given strike goes above 70L then it becomes a formidable level. Price often bounces off it. So I see that as a pivot on the options table.

For ex. It is very unlikely that Nifty will go below 5400 in August series... can you tell me why?

**********
Negative OI means positions being squared off. Not much information there. Seek big numbers in the options table to get the range of the month.

 

[nac]

Finally, the whole nation is bearish... not a single soul (figure of speech) has taken a long position. It will be very bad business for the market makers to crash the market further.

In fact, most of them have taken long (around 6000) and hoping for a reversal, biting their finger nails (you know I lost about a centimeter of my thumb finger) sitting over a pile of loss

 

[healthraj]

Hello Jamit brother, Healthraj bro

Can you please clarify few of my doubts ??

Regards
Taiki

Taiki,

5400 CE has 8lakh + open interest, but today the chang in OI is negative for this strike with rise in the contract price. What does this indicates ??

A negative Value in "CHG in OI" indicates squaring off. When the Market was making high the Calls were getting squared in 5400,5500,5600 and 5700.

Similarly When the Market was making Low the Puts were getting squared in 5800 and 5900.

Market today made high 5622 and then made low of 5568 and then high of 5659 and then closed low at 5608. So we cannot make any decision in isolation on the COI and Price Rise.

I go by the MAX OI and only thing we know now is that the Range for this month is 5400 to 6000. It has come down from 6000 and so we can say that we might expect 5400. The MAX Pain is at 5700 indicating that there might be a pullback to 5700 also.

How to read a pivot level in option table ?? And how are they created ?

Please go through the Rules that I have posted in the beginning of the thread. The Options table is downloaded from NSEIndia.com

 

[healthraj]

07-Aug-13:
FII & DII Analysis on Volume. First of all my opinion is that the Volumes of FII and DII are not in comparable terms and so I am not sure why we are comparing FIIs and DIIs. The "Net Sellers" or "Net Buyers" is based on the number of Contracts and not based on the net value

FII
Index futures - Net Sellers
Stock Futures - Net Buyers
Index Options - Short side
Stock Options -Long
Open Interest Highest at - LONG Puts @ 9L

DII
Index futures - Net Buyers
Stock Futures - Net Buyers
Index Options - Long side
Stock Options -No positions
Open Interest Highest at - LONG CALLS @ 2L

There were also two more Client Types, "Client" and "Pro". Hope "Pro" means Operators and "Client" means Retail Traders

Client - Open Interest Highest at - SHORT Puts @ 8.5L
Pro - Open Interest Highest at - Short Calls @ 3.95L

Conclusions :
DIIs are Buying.
FIIs are still not Buying.
Clients Want the market to Go UP and so selling / squaring off Puts
Operators are trying to take the market down by Selling Calls.

Note: I am not an expert and so Please help me or correct me if my conclusions are not correct.

12-Aug-13: FII & DII data

The "Net Sellers" or "Net Buyers" is based on the number of Contracts and not based on the net value

FII
Index futures - Net Sellers
Stock Futures - Net Buyers
Index Options - Long side
Stock Options -Short side
Open Interest Highest at - LONG Puts @ 9L

DII
Index futures - Net Sellers
Stock Futures - Net Buyers
Index Options - Not significant
Stock Options -Not significant
Open Interest Highest at - LONG CALLS @ 2L

Client - Open Interest Highest at - SHORT Puts @ 8.9L
Pro - Open Interest Highest at - SHORT Puts @ 4L

Conclusions :
Looking at the Index Futures Both the FII and DIIs have Sold.
FII are carrying the OI of 9L on LONG PUTs for a week now. So the downside in this market is not over.
Operators are trying to take the market UP by Selling PUTs.

 

[Taiki]

12-Aug-13: FII & DII data

The "Net Sellers" or "Net Buyers" is based on the number of Contracts and not based on the net value

FII
Index futures - Net Sellers
Stock Futures - Net Buyers
Index Options - Long side
Stock Options -Short side
Open Interest Highest at - LONG Puts @ 9L

DII
Index futures - Net Sellers
Stock Futures - Net Buyers
Index Options - Not significant
Stock Options -Not significant
Open Interest Highest at - LONG CALLS @ 2L

Client - Open Interest Highest at - SHORT Puts @ 8.9L
Pro - Open Interest Highest at - SHORT Puts @ 4L

Conclusions :
Looking at the Index Futures Both the FII and DIIs have Sold.
FII are carrying the OI of 9L on LONG PUTs for a week now. So the downside in this market is not over.
Operators are trying to take the market UP by Selling PUTs.

Hello Raj brother,

One question though. Sorry If this have been answered before..

firstly, who are the operators here ??
Secondly from participant wise OI data, FII are more long in puts and betting on downside. I guess so far we have been assuming that big pockets/FII are option writers. But here FII are more long on put contracts, than short on call contracts.. Client & retail investors are more selling options than FII.

Regards
Taiki

 

[healthraj]

Hello Raj brother,

One question though. Sorry If this have been answered before..

firstly, who are the operators here ??
Secondly from participant wise OI data, FII are more long in puts and betting on downside. I guess so far we have been assuming that big pockets/FII are option writers. But here FII are more long on put contracts, than short on call contracts.. Client & retail investors are more selling options than FII.

Regards
Taiki

I am not sure who are these operators. There are four types of "Client" in the Participant wise OI and Volume. Tow we know are FII and DII. "Client", I am assuming are "Retail" traders. "Pro", I am assuming to be "Operators"

 

[Taiki]

I am not sure who are these operators. There are four types of "Client" in the Participant wise OI and Volume. Tow we know are FII and DII. "Client", I am assuming are "Retail" traders. "Pro", I am assuming to be "Operators"

Thank you brother,

Any words on the second point ?? And Are Pro more powerful in driving our market than FII ??

Regards
Taiki

 

[arcus]

Thank you brother,

Any words on the second point ?? And Are Pro more powerful in driving our market than FII ??

Regards
Taiki

Pro refers to proprietary traders (brokers trading from their own account). Similar to a prop desk.

The most powerful participants in the Indian markets are FII's and not Pro's.

Clients are anybody and everybody who are not FII, DII or proprietary desk traders.

 

[DanPickUp]

Pro refers to proprietary traders (brokers trading from their own account). Similar to a prop desk.

The most powerful participants in the Indian markets are FII's and not Pro's.

FII>DII/Pro>Client

To make it clear to all: What are the FII's? Do you have an other word beside for that? as I know commercial traders or big traders or what is the specific word in terms you use?

 

[arcus]

To make it clear to all: What are the FII's? Do you have an other word beside for that? as I know commercial traders or big traders or what is the specific word in terms you use?

FII's are institutions which are permitted to participate in the Indian bourses despite being established or incorporated outside India.

For simplicity, just think of them as anybody who is not Indian but is in the Indian market (its not always that way, but you get the point)

Here is the list of all the FII's

Click on B and then C.... till Z to know each and every FII's name, address and telephone number!

Read this article. Its the best I have found on the net on FII's

If anybody here thinks FII's always make money, here is an interesting articles which I have read.

Its a three part article but it is very interesting for anybody willing to read.