There was a huge spike in 270 Puts (PE).
It means people sold 270 PE anticipating the price would not close below 270 before this month's expiry.
But the closing price of ZEEL on the next day (23/Sep) is 260.95.
(2/N)
Bhav Bhagwan Hai (Price is God)
Lekin Open Interest (OI) Bhagwan ka Baap Hai (OI is Father of God)
This is what some traders claim about Open Interest (OI)😄
Is it True or Not?
Check These Features about OI & Decide Yourself!
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#openinterest #OI
(1/N)
There was a huge spike in 270 Puts (PE).
It means people sold 270 PE anticipating the price would not close below 270 before this month's expiry.
But the closing price of ZEEL on the next day (23/Sep) is 260.95.
(2/N)
They have trapped - Either they have to book a huge loss or shift their position (it brings more risk to the table).
On 23/Sep, most people closed their position in 270 PE.
(3/N)
270 PE opened at 6.9 and closed at 13.5 (close to 100% losses for options sellers) on 23/Sep.
(4/N)
What is Open Interest (OI)?
OI is the total number of outstanding derivative contracts (both futures and options) that have not been settled (still open).
(5/N)
Similarly, if both close their position, then OI will decrease by 1.
(6/N)
Read this chart carefully a few times!
(7/N)
Volume count will be added irrespective of old or new player participation.
Have a look at the same example for volume.
(8/N)
Rise in Price + Increase in OI -> Bullish
Fall in Price + Increase in OI -> Bearish
Rise in Price + Fall in OI -> Short Covering
Fall in Price + Fall in OI -> Long Unwinding
(9/N)
First CE
Increase in CE + Increase in OI -> CE Long Build up
Decrease in CE + Increase in OI -> CE Short Build up
Increase in CE + Decrease in OI -> CE Short Covering
Decrease in CE + Decrease in OI -> CE Long Unwinding
(10/N)
Increase in PE + Increase in OI -> PE Long Build up
Decrease in PE + Increase in OI -> PE Short Build up
Increase in PE + Decrease in OI -> PE Short Covering
Decrease in PE + Decrease in OI -> PE Long Unwinding
(10/N)
But below are the important ones:
CE Long Buildup + PE Short Buildup -> Super Bullish
CE Short Buildup + PE Long Build up -> Super Bearish
CE Short Buildup + PE Short Buildup -> Sideways
(11/N)
There was a huge sell-off till 9.45 AM, and then it displayed some sideways move.
(12/N)
Most are CE Short Buildup and PE Long Buildup, right?
It denotes "BEARISH SENTIMENT"
(13/N)
Exchange updates OI data every 3 minutes.
So there will be a lag of "3 minutes" with any software vendor.
If anyone claims he provides live OI data (tick), then he/she is fake!
(14/N)
ICICI Bank CMP is 882.
But huge quantities of 900 and 920 CE have been solved by big people.
It means 900 & 920 act as crucial resistance zones!
(15/N)
ACC CMP is 2507.
But the next small support is only at 2460 and the major support is only at 2400.
Now you know what happens to ACC in the next few days🤣
(16/N)
If you get confused about analyzing options and OI, stick to Futures and OI information and manage your trades.
(17/N)
https://t.co/2Gn3SVlphB
Please note this is 3rd party site. You need to divert any doubts/questions to them.
Besides, you need to validate the accuracy of OI.
(18/N)
https://t.co/VzRFv5ieHz
https://t.co/vz75HK2kkL
https://t.co/51IZHXse1R
https://t.co/DKWuRbhsAq
PS - All are paid vendors, and I don't have any business association with them.
(19/N)
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1) Learn Anything - Search tools for knowledge discovery that helps you understand any topic through the most efficient
2) Grad Speeches - Discover the best commencement speeches.
This website is made by me
3) What does the Internet Think - Find out what the internet thinks about anything
4) https://t.co/vuhT6jVItx - Send notes that will self-destruct after being read.
