NIFTY Options Trading by RAJ

[soumanag]

At 12:30 PM:
Yesterday was a short covering rally. I sold the 8850 - 8450 Pair @95. Today closed the position @64.
Markets remain bearish with new Call additions @ 8800 & 8900 and major support at 8600 and then MAX OI at 8500.
MAX Pain @8800
VIX @ 15
Will be a bullish signal if only fresh Puts are added @ 8700 & 8600. Will be waiting for 2:00 PM i.e 15 mins after European markets open.

 

[healthraj]

At 12:30 PM:
Yesterday was a short covering rally. I sold the 8850 - 8450 Pair @95. Today closed the position @64.
Markets remain bearish with new Call additions @ 8800 & 8900 and major support at 8600 and then MAX OI at 8500.
MAX Pain @8800
VIX @ 15
Will be a bullish signal if only fresh Puts are added @ 8700 & 8600. Will be waiting for 2:00 PM i.e 15 mins after European markets open.

Good Analysis. All the best.

 

[nepolian]

At 12:30 PM:
Yesterday was a short covering rally. I sold the 8850 - 8450 Pair @95. Today closed the position @64.
Markets remain bearish with new Call additions @ 8800 & 8900 and major support at 8600 and then MAX OI at 8500.
MAX Pain @8800
VIX @ 15
Will be a bullish signal if only fresh Puts are added @ 8700 & 8600. Will be waiting for 2:00 PM i.e 15 mins after European markets open.

when i have taken strikes from 8500 to 9000... i have multiplied MAX_OI with strikes and got weighted average is 8760... can we use this as MAXPAIN?

 

[nepolian]

As per rule 7.. we have to compare Options Volatility with Historical Nifty Volatility..

We have average CE volatility (IV) < HVOLT
and
PE volatility (IV) < HVOLT

can we compare options volatility with VIX?

 

[nepolian]

At 12:30 PM:
Yesterday was a short covering rally. I sold the 8850 - 8450 Pair @95. Today closed the position @64.
Markets remain bearish with new Call additions @ 8800 & 8900 and major support at 8600 and then MAX OI at 8500.
MAX Pain @8800
VIX @ 15
Will be a bullish signal if only fresh Puts are added @ 8700 & 8600. Will be waiting for 2:00 PM i.e 15 mins after European markets open.

Sir..How to determine whether fresh Puts/Calls has been added or squared off?

 

[soumanag]

when i have taken strikes from 8500 to 9000... i have multiplied MAX_OI with strikes and got weighted average is 8760... can we use this as MAXPAIN?

Hi,

Max Pain would be on a particular strike. such as 8800 or 8700. It is the strike where option writers makes least amount of loss and option buyers looses most amount of money. For current month the MAX pain is @8800.
The formula for calculating MAX Pain is a bit trickey. OAT has a built in calculator in 2nd sheet. If u dont have OAT then I will try to provide more details on how to calculate it.
U can also try to download option oracle which has a built in calculator. Be sure to download the version compatible with NSE.

 

[soumanag]

Sir..How to determine whether fresh Puts/Calls has been added or squared off?

Simply look at the change in OI against each strike. The data is available in the NSE website and is updated frequently during trading hours. I prefer to plot the data in excel. Please refer below

U can see that change in call OI (Blue Line) @ 8700 & 8800 were high with substantial volume (green line) where as Put change OI (red line) was not high in fact at 8700 & 8800 they were negative with high volume (purple line) so bulls were winding up positions and booking losses (probably) and preparing to defend 8600 opening up the downside till 8300.....
Keep in mind that all these are theoretical at the end of the day it is your interpretation and more importantly your hard earned money.
Hope this helps

 

[nepolian]

Thanks so much sirs,
i have downloaded the OAT.
But I have not got the data.
I have refreshed many times. Should i copy-paste the data from option chain in SOData tab?

 

[nepolian]

Okey.. got the data... i have edited the "connection34"... that fetched the data into the SODATA tab.. and all worked...
Thanks so much Raj sir...

 

[hardik229]

Hi Soumanag,

Can you please share the excel of the OI graphs? It is very helpful.

Thanks..!!
Hardik Shah

Simply look at the change in OI against each strike. The data is available in the NSE website and is updated frequently during trading hours. I prefer to plot the data in excel. Please refer below

U can see that change in call OI (Blue Line) @ 8700 & 8800 were high with substantial volume (green line) where as Put change OI (red line) was not high in fact at 8700 & 8800 they were negative with high volume (purple line) so bulls were winding up positions and booking losses (probably) and preparing to defend 8600 opening up the downside till 8300.....
Keep in mind that all these are theoretical at the end of the day it is your interpretation and more importantly your hard earned money.
Hope this helps