NIFTY Options Trading by RAJ
- Thread starter healthraj
- Start date
- Tags nifty options chain raj oat
We are more or less at the end of the third week of the MAY -15 cycle.
So as per JUN-15 Options data the OI range is 8000-9000, indicating a minimum target of 8500 (AVG of OI)
So 8500 SPOT will be an important level to Watch. If this Down trend in Daily Charts need to be converted to an UP Trend, then after reaching 8500, it will have to find the support at 8275 Futures as per the Weekly Charts.
So as per JUN-15 Options data the OI range is 8000-9000, indicating a minimum target of 8500 (AVG of OI)
So 8500 SPOT will be an important level to Watch. If this Down trend in Daily Charts need to be converted to an UP Trend, then after reaching 8500, it will have to find the support at 8275 Futures as per the Weekly Charts.
While the Chart was giving a change in support level of 8355.
At the start of the Day, the COI was at 8200-8500, indicating a target of 8375 - Made low 8382.
The COI changed to 8200-8600 from 8200-8500, thus pointing to 8400 - 8400 met.
The COI changed to 8200-8800, pointing to an average of 8450 - Made high of 8432.
Let us see if it makes 8450.
The above is just an observation on how to use COI and OI.
So yesterday and Today seems to be consolidation days to move to 8500. When we see the COI Range as more than 200 in NIFTY, there is normally no BIG moves. The move is maximum restricted to 1%. Such days are good for Selling Pairs. As an example the 8300-8500 Pair was trading at ~95 on Tuesday. Yesterday it came down to ~83. Today it is at ~71.
At the start of the Day, the COI was at 8200-8500, indicating a target of 8375 - Made low 8382.
The COI changed to 8200-8600 from 8200-8500, thus pointing to 8400 - 8400 met.
The COI changed to 8200-8800, pointing to an average of 8450 - Made high of 8432.
Let us see if it makes 8450.
The above is just an observation on how to use COI and OI.
So yesterday and Today seems to be consolidation days to move to 8500. When we see the COI Range as more than 200 in NIFTY, there is normally no BIG moves. The move is maximum restricted to 1%. Such days are good for Selling Pairs. As an example the 8300-8500 Pair was trading at ~95 on Tuesday. Yesterday it came down to ~83. Today it is at ~71.
In the morning BANKNIFTY COI and OI suggested that it would close around 18500. The LTF Also suggested the support at 18400. So both are met.
The 18000-19000 Pair this morning was trading at ~147. Now it is trading at ~125. Once again even though BANKNIFTY moved very less today, By Selling Pair, one would have got ~20 points Just by looking at MAX COI and MAX OI. As they say whether the market goes UP or DOWN or FLAT, you make money through Options If only You understand the Options Chain data. While others who does not understand might say some reason for their failure.
The 18000-19000 Pair this morning was trading at ~147. Now it is trading at ~125. Once again even though BANKNIFTY moved very less today, By Selling Pair, one would have got ~20 points Just by looking at MAX COI and MAX OI. As they say whether the market goes UP or DOWN or FLAT, you make money through Options If only You understand the Options Chain data. While others who does not understand might say some reason for their failure.
8450 Was the Target from an Intraday perspective.
From a positional perspective, we can look at the MAX OI and say the target would be 8500, since the MAX OI is at 8300-8500 (Assuming the TREND is UP. In this case the hourly TREND and the Daily Intermediate TREND is UP).
So it depends on whether your trade is for Intraday or Positional.
The positional Trade is LIVE When the MAX OI was 8100/8000. A BUY from 8000 or 8100 is STILL LIVE.
From An Intraday perspective, we need to know three things.
1. What is the TREND going to be UP or DOWN or FLAT.
2. What is the Intraday Target.
3. What options to Trade : PAIR or Naked Options
So at around 9:30 AM to 10 AM in the morning, Look at the MAX COI Range
Case 1: If the Range is more than 200 points
1. TREND : FLAT
2. Target : Average of COI and OI. As and when the COI changes one can keep adjusting the Target.
3. Best for SELLing Pairs. So no need to Look at the COI Trend as to whether it is UP or DOWN. Trading in Naked Options to be Avoided or Closed if there are any Open Positions
Case 2: If the Range is Less than or equal to 200 points
1. TREND : Could be UP or DOWN. Use COI to Find it. You can see the COI Trend in the Mini OAT.
2. Target : If it is UP then the minimum Target would be the Average of COI and the MAX COI @ PE or CE depending on the TREND.
3. If the VOLT is under control, then one can SELL the PAIR. Or one Can also do Naked Options Trading. If not comfortable with Naked Options, better to close the PAIR and Wait for another opportunity.
So those who want to do Intraday Trading in NIFTY using Options, Just follow the above steps and Let me know if there are any challenges. We can work towards improving it
Note : At current Levels, this 200 point funda is based on my observation. I am not sure what would be the Ideal range for other stocks or indices.
From a positional perspective, we can look at the MAX OI and say the target would be 8500, since the MAX OI is at 8300-8500 (Assuming the TREND is UP. In this case the hourly TREND and the Daily Intermediate TREND is UP).
So it depends on whether your trade is for Intraday or Positional.
The positional Trade is LIVE When the MAX OI was 8100/8000. A BUY from 8000 or 8100 is STILL LIVE.
From An Intraday perspective, we need to know three things.
1. What is the TREND going to be UP or DOWN or FLAT.
2. What is the Intraday Target.
3. What options to Trade : PAIR or Naked Options
So at around 9:30 AM to 10 AM in the morning, Look at the MAX COI Range
Case 1: If the Range is more than 200 points
1. TREND : FLAT
2. Target : Average of COI and OI. As and when the COI changes one can keep adjusting the Target.
3. Best for SELLing Pairs. So no need to Look at the COI Trend as to whether it is UP or DOWN. Trading in Naked Options to be Avoided or Closed if there are any Open Positions
Case 2: If the Range is Less than or equal to 200 points
1. TREND : Could be UP or DOWN. Use COI to Find it. You can see the COI Trend in the Mini OAT.
2. Target : If it is UP then the minimum Target would be the Average of COI and the MAX COI @ PE or CE depending on the TREND.
3. If the VOLT is under control, then one can SELL the PAIR. Or one Can also do Naked Options Trading. If not comfortable with Naked Options, better to close the PAIR and Wait for another opportunity.
So those who want to do Intraday Trading in NIFTY using Options, Just follow the above steps and Let me know if there are any challenges. We can work towards improving it
Note : At current Levels, this 200 point funda is based on my observation. I am not sure what would be the Ideal range for other stocks or indices.
Last edited:
Actually I had stopped providing frequent updates after I provided the Intraday Strategy sometime back. I had also provided some daily guidelines and examples. But since there are some new comers, I thought I would provide some frequent updates so that People know how to interpret the data. As people say the Options Chain data and Change in OI, OI etc are available in the open in NSEIndia.com. Now how somebody interprets that data makes a lot of difference.
One challenge people will find is deciding the TREND based on the COI Data for the following reasons.
- XX50 Strikes data is not used properly and so the Accuracy of the Targets will not be good.
- My basic assumption was that the COI/OI changes when market makers are SELLing. But there are a fraction of traders who also BUY Options in HUGE quantity, which is not addressed in our assumptions. So what if the HUGE COI is a BUY and NOT A SELL. The Reason Why I am saying that it Options data is sometimes not good to Directional trading like Naked Options.
- One can also look at the Charts to take a more informed decision. I am sure Real traders also look at the Charts.
- OR it is the otherway. They look at charts and decide the TREND and for Intraday targets they could use Options Data.
- To summarize Options Data does not give the Entry point. It only gives the EXIT point.
1. For Intraday, use Charts for Entry and Use Options Chain for Exit.
2. Charts does not tell if the day is going to be FLAT. Use Options to find if the Day is going to be FLAT.
Disclaimer : I am not sure now Who in which thread is explaining all these because these are not found in any books. These are based on my "Comprehension", "Analysis", "Synthesis". Since this is not common knowledge and is purely based on my observations for the past three years, Do your own "Comprehension", "Analysis", "Synthesis" and Come to a "Conclusion" before "Application" in Real trades
. I am just referring to the Blooms Taxonomy on knowledge. :thumb: :thumb:
One challenge people will find is deciding the TREND based on the COI Data for the following reasons.
- XX50 Strikes data is not used properly and so the Accuracy of the Targets will not be good.
- My basic assumption was that the COI/OI changes when market makers are SELLing. But there are a fraction of traders who also BUY Options in HUGE quantity, which is not addressed in our assumptions. So what if the HUGE COI is a BUY and NOT A SELL. The Reason Why I am saying that it Options data is sometimes not good to Directional trading like Naked Options.
- One can also look at the Charts to take a more informed decision. I am sure Real traders also look at the Charts.
- OR it is the otherway. They look at charts and decide the TREND and for Intraday targets they could use Options Data.
- To summarize Options Data does not give the Entry point. It only gives the EXIT point.
1. For Intraday, use Charts for Entry and Use Options Chain for Exit.
2. Charts does not tell if the day is going to be FLAT. Use Options to find if the Day is going to be FLAT.
Disclaimer : I am not sure now Who in which thread is explaining all these because these are not found in any books. These are based on my "Comprehension", "Analysis", "Synthesis". Since this is not common knowledge and is purely based on my observations for the past three years, Do your own "Comprehension", "Analysis", "Synthesis" and Come to a "Conclusion" before "Application" in Real trades
. I am just referring to the Blooms Taxonomy on knowledge. :thumb: :thumb:
Last edited:
Dear Raj Sir,
Very amazing and lucid explanation. Hats off to you once again.
I want one clarification. For finding out MAX COI, you should consider only positive figure or absolute number. For eg if 8300CE is -200000( square off ) and 8400CE is +160000
( addition ), which will you consider for MAX COI?
Very amazing and lucid explanation. Hats off to you once again.
I want one clarification. For finding out MAX COI, you should consider only positive figure or absolute number. For eg if 8300CE is -200000( square off ) and 8400CE is +160000
( addition ), which will you consider for MAX COI?
Similar threads
-
-
-
Fall in volume of trading in Nifty-50 call options in 2016?
- Started by srikanthyadav444p
- Replies: 0
-
Too much risk in trading BankNifty or its options. Views welcome.- Started by kingsmasher1
- Replies: 10
-
