Tracking Nifty PC OI w.r.t Option Writer

[Pralhad]

Hello,

VIX is making lower and lower record in last couple of week. Today was Lowest VIX i.e. 17.73 since its inception.

Nifty Increased by 0.65% while PCR by 7.34%

Today Nifty making new Support Zone at 5200 lvl & Strenghten the 5100 Support Zone.

Today major action at 5100~5300 lvl. At 5100 lvl wee see the call covering and addition in put call. and at 5300 lvl Major increase in Put Option OI

What a % Change in PUT OI at 5300 lvl !! +216.50% !!!!

 

[Pralhad]

 

[Pralhad]

 

[Pralhad]

Very fantastic explaination given by SS in his Food for Thought Thread regarding PCR. Thank you very much SS sir.

Hi!

Sorry guys.

Writing anything in a hurry and with too many things on ones mind makes one make silly errors.

Let me correct them and re-post the entire previous message.


We all are aware of the PC Ratio, which is the ratio of OI of Put Options to that of Call Options. So, I did a little working for the PC Ratio for Nifty at last weeks daily closings OI for various strike rates, and the result was as follows :


Nifty 15th-Mar 16-Mar 17-Mar 18-Mar 19-Mar
Strike

4700 8.86 8.82 9.20 9.62 9.21
4800 6.82 7.05 6.84 6.83 6.58
4900 3.64 3.48 3.75 4.02 3.84
5000 3.24 3.88 4.43 4.50 4.60
5100 1.07 1.26 1.75 1.78 1.94
5200 0.43 0.77 1.19 1.14 1.68
5300 0.14 0.16 0.42 0.51 0.65
5400 0.04 0.04 0.04 0.03 0.07
5500 0.05 0.04 0.02 0.02 0.02


During the last week, the Spot Nifty stayed always above 5100 mark. So, the value of 1.00 or more for the PC Ratio indicates that the Puts were in access of the Calls. Also, we find that the value of PCR at the closing of Friday 19th March for the strike rates from 4700 to 5100 was higher than that on 15th March, which means that either more Puts were added, or the Calls got reduced or both.

This also means that a strong support has been created at almost every level. Only the value of PCR on 19th appears to have reduced, when compared with the PCR on the previous day, that is 18th March 2010.

Simultaneously, the increase in PCR for 5200 for the last two days of the week indicates an increase in support level at 5200 level. But that is at the close of Friday 19th March 2010.

It would be interesting to check the PCR for 5200 & 5300 on hourly basis during the trading session on Monday, to know more about the status of support-resistance at these level, to see if the same is increasing or decreasing, which may give a good input for day-trading purposes.

And while doing so, it would also be a good idea to keep an eye on PCR for the other two strike rates, that is 5100 and 5400.

In my opinion, hourly PCR values of the four strike rates, two below the trading Spot Nifty Value and two above, and the changes that result every hour, could provide a very good insight for day trading. But that is my opinion, and I could be wrong.

Cheers!

SS

 

[S S]

Does this analysis and Chart make sense?

Considering the fact that the Spot Nifty is above 5200, this high % change in the PCR, in my opinion, indicates that the support at 5200 has been strengthened and side by side, the resistance at 5400 also gets strengthened.

But with only 4 days to go for the Settlement, one cannot be sure about anything.

Well done Pralhad. Actually, such comparison may help a week later, when we are all in the initial stages of the April contracts.

:clap::clapping::clap::clapping:

 

[Pralhad]

 

[Pralhad]

 

[Pralhad]

Since now only one trading day left for march series to expire, therefore I am giving in addtion April month Chart.

 

[Pralhad]

 

[Pralhad]

April Month Series