Hi, Technofriends,
Should we consider the price change of the underlying (in this case spot NIFTY) or the price change of the option itself? which method is correct.?
Thanks in advance.
BP.
For options, you can consider the price change of the particular strike price option. For example, from the option chain posted, we can see that
1. there is an addition of OI in 5300 CE but the price has dropped by around 11.75 rs. This indicates that 5300 CE is being shorted.
2. If you see the 5300 PE, there is a drop in OI but price of 5300 PE has increased, which means PUT WRITERS are covering their shorts by buying the 5300 PUTS.
Hope this helps.
Thanks
Vaibhav