Trade with options data

[valuable_earner]

maybe i m wrong n moreover this thing is already pointed by many traders here.. seeing OI in last 5-6 trading days is not much effective then in early days... so its better to avoid trading as per OI in these days... take rest n start over again in new series that is from 24th

 

[kiranjakka]

Markets will definitely be volatile because of expiry a head. there was a clear indication that the data since morning after 10.30 supporting the bulls and we made a high of 5620 by 12.3pm even in the later half of the day was supporting bulls only if we are long since morning with out shorting the market we should have made a decent money. all put options were punished even 5700put closed at 84 down 32rs while call options ended on positive note. which indicate bullishness.as a options trader we should know that he premiums will be down by 2.30 later half of the day just because tomorrow is expiry. and we should know that trading in feb options is very risky one should look at march series which will be less volatile to these conditions.

 

[uttamkamlesh]

Guys! following link can be used to gauge bias of the stocks for the next day(s)....

http://www.bigpaisa.com/nse/futures-trades/open-interest/expiry/near-month

(a) Plan trade for the stocks which fit best, as during the week we have lots of choices easily available.

(b) Have 1 or 2-stocks to SHORT, 1 or 2-to go LONG simultaneously.

(c) For Long or Short consider only those stocks which have OI change at least 5%. Higher the better.

(d) BULLISH: If price increases AND OI increases.
.....BEARISH: If price decreases AND OI increases.

(e) Not easy to interpret near expiry due to roll-overs, after expiry again on track.

=> Define your stop Loss and Target as per the chart.

Paper trading for few weeks is definitely required.

 

[anilnegi]

Guys! following link can be used to gauge bias of the stocks for the next day(s)....


Uttamkamlesh, do you think this is good idea to buy/ sell in this manner i.e. increase in OI can be both (put & call), vice versa for decrease, put increase is ok but what out call OI increase, also you mentioned stoploss and target, can you ellaborate this, thanks

anil negi

 

[uttamkamlesh]

Guys! following link can be used to gauge bias of the stocks for the next day(s)....


Uttamkamlesh, do you think this is good idea to buy/ sell in this manner i.e. increase in OI can be both (put & call), vice versa for decrease, put increase is ok but what out call OI increase, also you mentioned stoploss and target, can you ellaborate this, thanks

anil negi

(a) In the tables we have OI data for FUTURES contracts not Options....

(b) Stop Loss and Target depend on your chart reading skill.
Swing High/Low, Previous day high/low. etc....can be used for the purpose....

...yes man...Hard-Work pays bigtime....

 

[anilnegi]

Got it, shall paper trade

anil

 

[trader15]

kab bhai ...3.30 pm ke baad...............

abhi 1 din baaki hai mere dost... expiry mein...

 

[trader15]

maybe i m wrong n moreover this thing is already pointed by many traders here.. seeing OI in last 5-6 trading days is not much effective then in early days... so its better to avoid trading as per OI in these days... take rest n start over again in new series that is from 24th

OI for deep out of money or deep in money: Yes you are right on looser coorelation factor as expiry nears


But for near money strike options: data interpretation will always be correct.

No Put writer will be selling 5600 Puts in 1 day prior to expiry in huge numbers when if you don't know whats ahead.... They would rather put in money on March series...

 

[kiranjakka]

 

[kiranjakka]

I have been following your thread for sometime and its been a a great learnign expereince. I had one query though, the OI data from NSE has a 3 min lag (plz correct me if I am wrong), so is it useful to take a lag data into consideration for doing real trades? Also, one ( and I can think of the only) flip side to follow OI is when there is sudden spike in the market...say during the day when RBI announces its policies. How should one tackle this kind of a knee-jerk reaction? Or should someone just stay away till the news is broken?

yes OI data what we get from nse has 3min lag one cannot do real trades with OI data because you dont know at what price point you can enter or exit a trade according to OI. so you should have your charts/or levels in with you to take real trades in OI. here i am talking about EOD changes

OI will help you to determine the trend

once if you are with the trend beleive me 90% of your trades will positive



and regarding any news flow market predicts the news faster than anybody else. there wont be much change in OI data thats what i have observed during results season or a head of any news because its already reflected in OI. there will be change in price movements and not very much change in OI.


there wont be much change OI becasue writers take positions a head of news