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OPEN INTEREST IN NIFTY OPTIONS |
yashrahul
Yellow Belt
Joined: 29 Jun 2013
Posts: 512
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Post: #226  Posted: Thu Jan 02, 2014 8:14 pm Post subject: |
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Note:Aaaaaaaaaaaaat Laaaaaaaaast the markets have started being volatile again..woken up on the right side or the wrong side depends on individual positions but at least woken up...
6300 and 6200 put losing oi clearly indicating further move on the downside and along with it 6300 call adding more than 6 lakhs and 6200 call adding more than 3 lakhs in oi supporting the theory of move on the downside..where will it stop or what is the point of support is not what options data can say...options data suggests today that more downside is coming it might change altogether tomorrow because oi is not that huge at individual strikes as of now but the erosion of premium in 6300 call and subsequent appreciation of premium in 6300 put owing to unwinding of long positions states that this is not a one of fall ..for confirmation look out for the trend in the coming days and also tomorrow's closing and subsequent options data End Of The Day is very important...best of luck  |
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vinay28
Black Belt
Joined: 24 Dec 2010
Posts: 11748
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| Post: #227 Posted: Thu Jan 02, 2014 8:20 pm Post subject: |
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| yashrahul wrote: | Note:Aaaaaaaaaaaaat Laaaaaaaaast the markets have started being volatile again..woken up on the right side or the wrong side depends on individual positions but at least woken up...
6300 and 6200 put losing oi clearly indicating further move on the downside and along with it 6300 call adding more than 6 lakhs and 6200 call adding more than 3 lakhs in oi supporting the theory of move on the downside..where will it stop or what is the point of support is not what options data can say...options data suggests today that more downside is coming it might change altogether tomorrow because oi is not that huge at individual strikes as of now but the erosion of premium in 6300 call and subsequent appreciation of premium in 6300 put owing to unwinding of long positions states that this is not a one of fall ..for confirmation look out for the trend in the coming days and also tomorrow's closing and subsequent options data End Of The Day is very important...best of luck |
option price can appreciate only due to addition to long position and not unwinding. |
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yashrahul
Yellow Belt
Joined: 29 Jun 2013
Posts: 512
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| Post: #228 Posted: Thu Jan 02, 2014 8:33 pm Post subject: |
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| rk_a2003 wrote: | | paa wrote: | | Nifty was -2 points. both calls & puts added premium. what does this indicate? Please explain |
Market participants are expecting a big move either side. Nifty was in narrow range from quite a long time and it's obvious that it has to move either side. |
Paa: It generally happens at the start of the series and also when the markets preparing themselves for a big move, also when spreads are taken and also as mentioned by rk_a2003. |
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vinay28
Black Belt
Joined: 24 Dec 2010
Posts: 11748
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| Post: #229 Posted: Thu Jan 02, 2014 8:42 pm Post subject: |
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| actually it's because of fear factor (vix) and hence premium going up. |
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apka
Black Belt
Joined: 13 Dec 2011
Posts: 6137
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| Post: #230 Posted: Thu Jan 02, 2014 8:57 pm Post subject: |
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| vinay28 wrote: | | actually it's because of fear factor (vix) and hence premium going up. |
fear factor or who dares win  |
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yashrahul
Yellow Belt
Joined: 29 Jun 2013
Posts: 512
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| Post: #231 Posted: Thu Jan 02, 2014 9:02 pm Post subject: |
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| vinay28 wrote: | | yashrahul wrote: | Note:Aaaaaaaaaaaaat Laaaaaaaaast the markets have started being volatile again..woken up on the right side or the wrong side depends on individual positions but at least woken up...
6300 and 6200 put losing oi clearly indicating further move on the downside and along with it 6300 call adding more than 6 lakhs and 6200 call adding more than 3 lakhs in oi supporting the theory of move on the downside..where will it stop or what is the point of support is not what options data can say...options data suggests today that more downside is coming it might change altogether tomorrow because oi is not that huge at individual strikes as of now but the erosion of premium in 6300 call and subsequent appreciation of premium in 6300 put owing to unwinding of long positions states that this is not a one of fall ..for confirmation look out for the trend in the coming days and also tomorrow's closing and subsequent options data End Of The Day is very important...best of luck |
option price can appreciate only due to addition to long position and not unwinding. |
Vinay28 :I knew i didn't mention it properly and forgot that every word written by me is going to be seen with a magnifying glass..now i will explain to you what i meant ..Let us consider today's condition...suppose i am a trader who has written a 6300 put in the morning when the markets were up then i am long on the nifty by being short on the put (i myself never trade in futures..whenever i am bullish..that is i want to be in long position...i short the put) but when the markets started tanking i who was by then short on the put and there by long on the nifty had to cover my short and there by "appreciation of premium in 6300 put owing to unwinding of long positions".
Also "option price can appreciate only due to addition to long position and not unwinding" is still debatable i feel ...but with your knowledge i accept it and don't feel the necessity of a debate. |
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apka
Black Belt
Joined: 13 Dec 2011
Posts: 6137
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| Post: #232 Posted: Thu Jan 02, 2014 9:32 pm Post subject: |
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yashrahul, if what you described is how you traded then it should be "appreciation of premium in 6300 put owing to covering of short positions" because EOD OI has dropped in 6300pe.
If you mention 6300pe and then words long, covering, short, unwinding then it will be read and related to that trade and not what's in your mind of being opposite of side for nifty movement or a hedge against some index stock or bank nifty etc.
I haven't seen Vinay in sherlock's attire, so I am sure Vinay's intention was to inform/correct as others also must be reading and not to pin point.
Also, Vinay's "option price can appreciate only due to addition to long position and not unwinding" is also correct, if there is shedding of OI in puts while market is falling, it's indication shorts are being covered by put writers... had the market fallen and premiums lost (which is what is the trgt of option writers in order to earn) then it can be said it is long unwinding as put long holders dont expect further downside to earn more on it.
Last edited by apka on Thu Jan 02, 2014 9:41 pm; edited 1 time in total |
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vinay28
Black Belt
Joined: 24 Dec 2010
Posts: 11748
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| Post: #233 Posted: Thu Jan 02, 2014 9:38 pm Post subject: |
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yash, price goes up because buyers (their volume) exceeds sellers and viceversa, right? You have yourself admitted that you had to cover your shorts in puts (and not longs) which means people like you covered shorts while others bought puts too.
PCR on the other hand is often confusing, as it is not clear whether its rise is due to increase in buying or writing of puts vis-a-vis calls till sometimes it is too late for intraday players. I am keen to see pcr today. It has been hovering around 0.85 for some days. |
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yashrahul
Yellow Belt
Joined: 29 Jun 2013
Posts: 512
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| Post: #234 Posted: Thu Jan 02, 2014 11:24 pm Post subject: |
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| vinay28 wrote: | yash, price goes up because buyers (their volume) exceeds sellers and viceversa, right? You have yourself admitted that you had to cover your shorts in puts (and not longs) which means people like you covered shorts while others bought puts too.
PCR on the other hand is often confusing, as it is not clear whether its rise is due to increase in buying or writing of puts vis-a-vis calls till sometimes it is too late for intraday players. I am keen to see pcr today. It has been hovering around 0.85 for some days. |
Vinay 28:i never had to cover my shorts or longs for as i had given it an example..i was not there in the markets for over a week or so i only came in today at close to 2 pm...what you are trying to say is the same only your words are different then mine what i call unwinding in long positions(means covering of shorts in puts) u say formation of shorts and vice versa...u write from a nifty future point of view and i being an options trader all my life write from a pure options point of view...whatever u have written is correct in other words whatever i have written is not wrong either.
My view as far as pcr is concerned it gives a clear indication very rarely and is difficult to follow |
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yashrahul
Yellow Belt
Joined: 29 Jun 2013
Posts: 512
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| Post: #235 Posted: Fri Jan 03, 2014 10:23 pm Post subject: |
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Note:6300 call adds more than 9 lakh shares in oi and 6300 put sheds 7 lakhs in oi...6300 is gone now and the bulls try to defend the 6200 strike and coincidentally 6200 put has nearly the same oi as 6300 call..so now bulls defend 6200 and try to remain above it... bears defend 6300 by not allowing the nifty to go above 6300..one side will be breached in the coming days (confirmed only after look at EOD figures)and either 6200 put or 6300 call will lose oi the one which loses oi will tell us the trend in coming days..if 6200 put loses oi then we go below 6200 and if 6300 call loses oi then we go above 6300 ...it will take some days for this to happen but eventually it will happen ..if it doesn't happen then the markets move in a narrow range of 80-100 points over the month ..kill the put/call premium
6000 put and 5900 put add more than 8 lakhs in oi...premium erosion indicates writing..5700 put adds 16 lakhs in oi not sure whether it is writing as this trend was witnessed in july-august where deep otm puts were bought..depends on the trend that emerges for further clarity on 5700 put increase in oi |
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yashrahul
Yellow Belt
Joined: 29 Jun 2013
Posts: 512
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| Post: #236 Posted: Mon Jan 06, 2014 8:11 pm Post subject: |
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| Note:As per my last note i had mentioned that either 6200 put will cut oi or 6300 call will cut oi..unfortunately none of them have cut oi today but 6300 call has added oi of more than 8 lakhs...meaning that traders are at least not expecting the markets to go above 6300 in this series...whether further downfall happens can very well be gauged by keeping a watch on the 6200 put if it cuts oi of more than 10 lakhs in EOD then be rest assured that the markets will be well below 6150 by then..unfortunately ITM puts have not shown any significant increase in premium even though the markets have closed daily in the red for the past 3 trading sessions...it seems the traders and institutions still feel that the correction is not going to be that deep..if market breaks decisively in the coming 2 to 3 days and unwinding of traders and institutions who are short on puts(I have to be careful with my words ...magnifying glass...remember).. have to cover their shorts(on puts.. better be clear) then the markets can effortlessly reach 6050 or below..as of now one can't still say definitely about the direction in the next few days... 50 points up or down on nifty spot from today's closing level on a EOD basis i feel will define the direction in the coming days...as always....best luck |
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yashrahul
Yellow Belt
Joined: 29 Jun 2013
Posts: 512
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| Post: #237 Posted: Tue Jan 07, 2014 10:04 am Post subject: |
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| waiting for 6200 put to start shedding oi |
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yashrahul
Yellow Belt
Joined: 29 Jun 2013
Posts: 512
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| Post: #238 Posted: Tue Jan 07, 2014 10:26 am Post subject: |
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| 6200 put is losing oi very slowly but best news for bears is 6150 put is shedding oi faster and 6200 call early indications are that it is being written with more than 5 lakh in oi....experts will point out that intraday options data is useless they are correct wait for the EOD figures and today's close is very very crucial. |
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yashrahul
Yellow Belt
Joined: 29 Jun 2013
Posts: 512
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| Post: #239 Posted: Tue Jan 07, 2014 11:57 am Post subject: |
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| 6200 put still not cutting oi as per expectations...still no clear indications if markets will fall further...solace for the bears is 6200 call is being written it seems with addition of more than 8 lakhs in oi as of now...wait for EOD options data and today's close which i say again is very very crucial. |
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yashrahul
Yellow Belt
Joined: 29 Jun 2013
Posts: 512
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| Post: #240 Posted: Tue Jan 07, 2014 1:58 pm Post subject: |
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| 6200 put still not cutting oi...markets trying to defend 6200 as of now...waiting for EOD options data and nifty spot at close |
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