PUT and CALL options

[columbus]

May Series Day=19 Nifty=4921 (86)

The strong up-move moved the lower ceiling to 4800.
The Expiry Zone (EZ) stands at (4800~5000).

On CALL side there is NEGATIVE OI and on PUT side we have POSITIVE OI.

OPEN INTEREST-Interpretation

Open interest is usually used as an indication of the strength of a price
movement, but on its own it does not provide any indication of the direction
of the price movement.

Increasing open interest shows that there is strength behind the current price
movement, and decreasing open interest shows that there is a weakening of the
current price movement. For example, increasing open interest along with
increasing prices indicates that the upward price movement could continue,
but decreasing open interest along with increasing prices indicates that the
upward price movement may be about to reverse.

Open interest is also used to determine if a market is likely to be trending or
range bound (i.e. choppy). Increasing open interest shows that the rate of
new trades is increasing, which indicates that the market is being actively
traded. While decreasing open interest shows that the rate of news trades
is decreasing, which indicates that the market may be entering a time of
less active trading. (Courtesy:daytrading.about.com)


In this series we have 9 UP days and 11 DOWN days:
UUUDDDUDDDDDUDUUUDDU
(After considering Previous Expiry day at the beginning)

 

[columbus]

thanks Columbus Sir of the update of the excel file in the format that has helped me view in my computer. Really a great help. Yes, the earlier one was 48 and the present one 132 Kb.
I will study and get back to you
Thanks again

Hi Balu,

Actually I used to give the entire option report, as seen in NSE website.
But Adityasaraf,one boarder here,wrote a simple excel program and made
it more useful and colorful.Credit should go to him.

 

[Trader5]

Re: May Series Day=19 Nifty=4921 (86)

The strong up-move moved the lower ceiling to 4800.
The Expiry Zone (EZ) stands at (4800~5000).

On CALL side there is NEGATIVE OI and on PUT side we have POSITIVE OI.

OPEN INTEREST-Interpretation

Open interest is usually used as an indication of the strength of a price
movement, but on its own it does not provide any indication of the direction
of the price movement.

Increasing open interest shows that there is strength behind the current price
movement, and decreasing open interest shows that there is a weakening of the
current price movement. For example, increasing open interest along with
increasing prices indicates that the upward price movement could continue,
but decreasing open interest along with increasing prices indicates that the
upward price movement may be about to reverse.

Open interest is also used to determine if a market is likely to be trending or
range bound (i.e. choppy). Increasing open interest shows that the rate of
new trades is increasing, which indicates that the market is being actively
traded. While decreasing open interest shows that the rate of news trades
is decreasing, which indicates that the market may be entering a time of
less active trading. (Courtesy:daytrading.about.com)


In this series we have 9 UP days and 11 DOWN days:
UUUDDDUDDDDDUDUUUDDU
(After considering Previous Expiry day at the beginning)

Excellent explanation though. But I am bit confused here.

To understand better can you explain by taking one or two strike price value which is close to today's closing or so?

Open interest increase in PUT from 5000, 4900 to 4700. What that means? Does it show that we are heading towards 4700?

Now come back to CALL for same strike range (4700- 5000). I observed that from 4700 to 5000 open interest increased. What does means? Does that mean we heading upward?

I understand that buying PUT means bearish and Buying calls bullish in market.

So Are we heading upward or downward according to PUT/CALL open interest?

Please try to make it more simpler with one example.

 

[columbus]

Re: May Series Day=19 Nifty=4921 (86)

Excellent explanation though. But I am bit confused here.

To understand better can you explain by taking one or two strike price value which is close to today's closing or so?

Open interest increase in PUT from 5000, 4900 to 4700. What that means? Does it show that we are heading towards 4700?

Now come back to CALL for same strike range (4700- 5000). I observed that from 4700 to 5000 open interest increased. What does means? Does that mean we heading upward?

I understand that buying PUT means bearish and Buying calls bullish in market.

So Are we heading upward or downward according to PUT/CALL open interest?

Please try to make it more simpler with one example.

Both 4800PE & 4900PE saw some good addition of OI of around
1.4M and 1.8M respectively.That means markets will be traded
actively in PUT side.
That means a Downward movement.

 

[trader15]

Re: May Series Day=19 Nifty=4921 (86)

Both 4800PE & 4900PE saw some good addition of OI of around
1.4M and 1.8M respectively.That means markets will be traded
actively in PUT side.
That means a Downward movement.

And check out the sudden OI in 4600 PE too.

Another factor supporting downtrend is : If markets were to move up, there would be decrease in Calls OI of 5000,5100 levels.... There is big lull there...

 

[TraderRavi]

Re: May Series Day=19 Nifty=4921 (86)

Both 4800PE & 4900PE saw some good addition of OI of around
1.4M and 1.8M respectively.That means markets will be traded
actively in PUT side.
That means a Downward movement.

market moving up and put OI increasing means puts written therefore bullish .....calls OI decreasing means calls covered....heavy put writing at 4800/4900 level indicates smart money thinks nifty will not go below these levels....but this can change on day to day basis ......I think expiry at 4850 - 4920 level...

 

[anup0212]

hey columbus...what does this means "UUUDDDUDDDDDUDUUUDDU
".....does this also shows anything

 

[DanPickUp]

Deleted --------------------------------------------------------

 

[trader15]

Re: May Series Day=19 Nifty=4921 (86)

market moving up and put OI increasing means puts written therefore bullish .....calls OI decreasing means calls covered....heavy put writing at 4800/4900 level indicates smart money thinks nifty will not go below these levels....but this can change on day to day basis ......I think expiry at 4850 - 4920 level...

Few facts: If put seller believes market is gonna be up tomorrow: then why not huge PE interest at 5000. If call writer believes market gonna be up tomorroW: why +ve OI @ 5100

And 1million+ OI at lower strike at put side, with 1 higher i.e. 5000 not having significant writing --->> Indicates: huge intraday pull back tomorrow..

Again just a learner like everyone else..... so lets see whether interpretation holds ground or market humbles mee

 

[TraderRavi]

Re: May Series Day=19 Nifty=4921 (86)

Few facts: If put seller believes market is gonna be up tomorrow: then why not huge PE interest at 5000. If call writer believes market gonna be up tomorroW: why +ve OI @ 5100

And 1million+ OI at lower strike at put side, with 1 higher i.e. 5000 not having significant writing --->> Indicates: huge intraday pull back tomorrow..

Again just a learner like everyone else..... so lets see whether interpretation holds ground or market humbles mee

looks like 4800 is saved for this expiry just 5 days to go .....big money dont want to break 4800 level may be they had sold puts below that level ..OTOH nifty is not interested in going above 4950 ...so its moving in a range .. buy @ 4800 and sell @ 4900 level type of market...