Trade with options data

[pav]

We just need to remember following behaviour:

a) If OI and Price is UP,Long build up taking place
b) If OI is UP and Price is DOWN,Short build up taking place.
c) If OI is DOWN and Price is UP,Short Unwinding taking place.
d) If OI and Price is DOWN,Lond Unwinding taking place.

Now if you look at Hindalco 130 and 120 PUT,84000 and 98000 is the Change in OI which means Short Build is taking place.Now i am not saying its going to reach at those levels but those levels needs be watched closely as well.

Hindalco 130 and 120 PUT,84000 and 98000 is the Change in OI.....from where you got these figures???
please post the link because now NSE optionchain for stock is not working.

 

[prabhsingh]

Hindalco 130 and 120 PUT,84000 and 98000 is the Change in OI.....from where you got these figures???
please post the link because now NSE optionchain for stock is not working.

From Bhavcopy,i m sorry its 846000 for 120 and 740000 for 130.

 

[TheDreamer]

When you buy a put the maximum loss that you can make is the premium amount whereas in case of writing a put without owning losses can be unlimited.In above example if people are writing the puts than "Change in OI" should not have been in negative.

Will you please come again? Change in OI of the above-mentioned puts are in positive... So put writing is taking place as the price is going up.

We just need to remember following behaviour:

a) If OI and Price is UP,Long build up taking place
b) If OI is UP and Price is DOWN,Short build up taking place.
c) If OI is DOWN and Price is UP,Short Unwinding taking place.
d) If OI and Price is DOWN,Lond Unwinding taking place.

Now if you look at Hindalco 130 and 120 PUT,84000 and 98000 is the Change in OI which means Short Build is taking place.Now i am not saying its going to reach at those levels but those levels needs be watched closely as well.

First of all, what's right for futures or stock prices is not always correct for options...
Generally, OI build up in puts means underlying's price will go up or meander near the strike price...
Moreover looking at the chart patterns of Hindalco (Wolf Wave), I see more upside than downside risk... my target would be 145+ though might not be in one upmove...

(Last but not the least, I hold the rights to be wrong)

 

[prabhsingh]

Will you please come again? Change in OI of the above-mentioned puts are in positive... So put writing is taking place as the price is going up.



First of all, what's right for futures or stock prices is not always correct for options...
Generally, OI build up in puts means underlying's price will go up or meander near the strike price...
Moreover looking at the chart patterns of Hindalco (Wolf Wave), I see more upside than downside risk... my target would be 145+ though might not be in one upmove...

(Last but not the least, I hold the rights to be wrong)

People can even but the Put rather then Writing even if spot price is going up.Isn't that true?Secondly,if put writing(selling) is taking place then why OI is showing in positive.Should not it been in negative?

 

[TheDreamer]

People can even but the Put rather then Writing even if spot price is going up.Isn't that true?Secondly,if put writing(selling) is taking place then why OI is showing in positive.Should not it been in negative?

Answering your second question first. When put writing is taking place, the objective of the put writer is to pocket the premium of the written put. So he/she will try to write them at a strike price which will act as a support in the near future. Generally, the put strike price having maximum OI is considered the support and the call strike price having maximum OI is considered the resistance, near term.

For the 1st part... you didn't give much attention to the contents of the whole thread before asking these rudimentary questions. This thread 'Trade with options data' is an endeavor to predict the direction of the market by observing the change in OI of the options. This is one of the those trading ideas and not a full-scale trading system.

 

[darshanshukla]

Yes, Dreamer shown the actual view of the thread,
Just think...
1) to buy 130PE of Hindalco you need only 6000rs and to short same you need around 52000rs Margin in your account
2) Indian market is ZERO SUM Game (all market is like this) so for one buyer you need one seller... thats known by all
3) suppose 840000 OI increase and half of them are buyer so other half who are selling this put with 52000 margin are not fooooooollllll, they are more smarter and they have more space to trade so they will buy this stock in CASH or FUT to bring this up so put buyer will enjoy their premium @ ZERO and seller will also....

I hope you got the point P.SINGH

Happy Option trading ahead,
Darshan

Answering your second question first. When put writing is taking place, the objective of the put writer is to pocket the premium of the written put. So he/she will try to write them at a strike price which will act as a support in the near future. Generally, the put strike price having maximum OI is considered the support and the call strike price having maximum OI is considered the resistance, near term.

For the 1st part... you didn't give much attention to the contents of the whole thread before asking these rudimentary questions. This thread 'Trade with options data' is an endeavor to predict the direction of the market by observing the change in OI of the options. This is one of the those trading ideas and not a full-scale trading system.

 

[darshanshukla]

since today morning stock option chain is not visible on NSE option chain
I think they have seen that many are trading from it.....
if anyone get it please post how to go there???
Thanks

 

[TheDreamer]

since today morning stock option chain is not visible on NSE option chain
I think they have seen that many are trading from it.....
if anyone get it please post how to go there???
Thanks

The NSE-idiots have changed the display of the whole thing... It's now available from the Option chain.


Home> F&O > Contracts Information > List of Underlyings & Underlying Info

 

[TheDreamer]

The NSE-idiots have changed the display of the whole thing... It's now available from the Option chain.


Home> F&O > Contracts Information > List of Underlyings & Underlying Info

Now it's working fine again... Plz check.

 

[trdstudent]

Now it's working fine again... Plz check.

And it indicates we r going down 5200