NIFTY Options Trading by RAJ

[kcsusha]

Today NF opened at 8670, made an initial high of 8684, then went down all the way to
8640, suddenly made U turn, went as high as 8694 and finally closed at 8666. Is this
small fall from 8684 to 8640 due to unwinding of 8700PEs. In that case, can we infer
that whenever there is negative values in PEs ( strike prices at ATM/ITM ), there may be a fall and whenever there is negative values in CEs, there may be a rise in the market. It may be seen that while 8700PEs are getting reduced, 8700CEs are steadily
rising. How to accurately judge whether market will fall or rise because of negative values in PE and CE.

 

[Riskyman]

Today NF opened at 8670, made an initial high of 8684, then went down all the way to
8640, suddenly made U turn, went as high as 8694 and finally closed at 8666. Is this
small fall from 8684 to 8640 due to unwinding of 8700PEs. In that case, can we infer
that whenever there is negative values in PEs ( strike prices at ATM/ITM ), there may be a fall and whenever there is negative values in CEs, there may be a rise in the market. It may be seen that while 8700PEs are getting reduced, 8700CEs are steadily
rising. How to accurately judge whether market will fall or rise because of negative values in PE and CE.

8700 CE being added means that traders are confident that the market is unlikely to consistently trade over 8700 in the short term i.e 8700 is the ceiling for the time being. 8700 Pe reducing means that traders feels that markets are likely to fall further and hence they want to cover their "sell" positions. Maybe even switch to lower strikes. You have to see how the overall OI is playing out too.

There are some good experts on this thread and Im sure they will respond with intricate details of the "options game".

 

[kcsusha]

Today's observation:-
8700PE OI going on increasing whereas 8700CE OI going on decreasing.
So advantage Bulls. Hence Market gone up from 8700 to 8759.
Hats off once again to Raj sir for this simple but most effective tool of OI.

 

[nepolian]

To all my Seniors.... I can't understand today's 90+ point move in nifty... How you interpret watching yesterday's data... and what is today's data suggesting?

 

[hardik229]

Same question from me as well. What has happened suddenly for 90 Points rally. As per yesterday's data I could interpret that further downfall will be there. Raj please explain.

Thanks..!!
Hardik Shah

To all my Seniors.... I can't understand today's 90+ point move in nifty... How you interpret watching yesterday's data... and what is today's data suggesting?

 

[nepolian]

Soumanag ji... I am uploading chgoi chart...

can i interpret that 8700CEs are being sqredoff heavily and 8700PEs are written.. also 8800CEs are also squered off....??

 

[kcsusha]

Nepolian Saab,
Where can I find this Change in OI chart? Instead of figures, this chart
is more visible.

 

[soumanag]

Soumanag ji... I am uploading chgoi chart...

can i interpret that 8700CEs are being sqredoff heavily and 8700PEs are written.. also 8800CEs are also squered off....??

U r correct... seems that like US market Indian markets assumed no rate hike from FED. Monkey see monkey do :lol: our markets are closely correlated to DOW which rallied by 1.29% last night. Might be a bull trap though weekly trend remains bearish..... so be careful about any fresh long positions

 

[singlap]

Highest OI remains at 8500 /9000 , but highest COI is now 8700 / 9100. Average shows a level of 8825 , which should act as a resistance (with no change in data). 8700 should be first support although market is already below 8700. But individual strikes show bullish trend upto 8800. So, we should expect it to go closer to 8800 today or there should be significant change in data. Please correct me Raj , wherever I am wrong.

 

[hardik229]

Soumanag ji,

Yes based on US market we rallied, but as per yesterday's OI data market should fall further.

How can we avoid this sort of spike?

U r correct... seems that like US market Indian markets assumed no rate hike from FED. Monkey see monkey do :lol: our markets are closely correlated to DOW which rallied by 1.29% last night. Might be a bull trap though weekly trend remains bearish..... so be careful about any fresh long positions