Support if Mr A buys 10 lots of 17000ce in Nifty and Mr B sells 10 lots of call in Nifty then the total Oi on 17000 strike price will be 10.
So Oi is basically the number of outstanding contracts which are not squared off.
WHAT IS OPEN INTEREST, HOW TO ANALYZE IT AND DOES IT WORK?
In the thread I'll explain everything about Open interest and also all the tools used to analyze it and my personal opinion.
THIS IS THE ONLY THREAD YOU'LL EVER NEED ON OPEN INTEREST.
Support if Mr A buys 10 lots of 17000ce in Nifty and Mr B sells 10 lots of call in Nifty then the total Oi on 17000 strike price will be 10.
So Oi is basically the number of outstanding contracts which are not squared off.
Oi is only used to determine support and resistance on a particular strike price.
So 16000 and 16200 level can be considered as good supports.
In the same way, 16500 ce has highest Oi and it can be considered as a resistance.
Highest Oi at 16500ce indicates that highest number of people have sold it BUT it also means that highest number of people have Bought it!
If 16500 acts as resistance, the option will go to 0 and all the buyers will lose money.
Why do we look at things from an option seller's perspective?
And also most of the option sellers are positional hence considering things from their perspective can work .
But there's a catch!
- Total Oi.
I've explained it already in the above example. 16200pe,16000pe on the put side have highest Oi
Change in oi represents the total change in Oi "TODAY" or present day/right now.
For example 16300pe has the highest addition on change in oi.
Hence we can expect 16300pe to be a good support since option sellers are building their postions.
Taking the above example, lets say if market starts to trade below 16300, then the change in Oi figure of 69k at 16300pe will start to drop.
This indicates that 16300pe writers are giving up and this is a bearish sign.
If the change in Oi figure, starts to turn negative , then it means that the positional option writers are giving up which is a stronger sign.
Out of these 4 tools what should you consider?
So there is no black and white answer you have to take reference from these tools and form your own view. You have to look at everything.
NO!
In 2018, Total Oi used to work very well.
In2019, Change in Oi was working very well.
But in 2020, Oi completely stopped working.
Earlier it was very rare to see the strikes with highest oi get breached. Market used to perfectly respect it. But that's not the case now.
If Banknifty is at 35800, then 36000ce will have highest oi and 35000pe will have highest oi.
If Banknifty goes above 36000 , then 36000ce oi will start to drop
Oi will keep on building and unwinding at every 500 pts strike price Which does make it useful in 2022.
For more learnings join our telegram channel : https://t.co/uNIrqq5aDP
More from Aditya Trivedi
Hello and welcome to my profile.
This is a master thread of all the videos I've put up on my Youtube Channel.
I've shared plenty of learnings based on Option Strategies, Trading Psychology, Price action and other aspects of trading.
Will keep on updating this thread.
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Explained with live backtesting and
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This is a master thread of all the videos I've put up on my Youtube Channel.
I've shared plenty of learnings based on Option Strategies, Trading Psychology, Price action and other aspects of trading.
Will keep on updating this thread.
What is a Short strangle and how to do it the right way
Explained with live backtesting and
As requested by most of you guys, decided to start a basic options trading strategies series.
— Aditya Trivedi (@itsAdityaT) July 21, 2021
The first video is out with live back test and adjustments.
Here's it : https://t.co/qi4Fsm2r6p
Banknifty Weekly option strategy with adjustments.
Explaining the best way to execute this strategy to make 1% profit a
Finally my Banknifty option selling strategy for makking 1% a week video is out!
— Aditya Trivedi (@itsAdityaT) May 30, 2021
I intentionally went a bit slower so that it becomes easy to understand.
If you have any doubts, I'll be happy to answer.
Try it and let me know how much money you made.\U0001f609https://t.co/Jnbr77EGOh
Nifty weekly option strategy with adjustments. Explained every detail in
Nifty Weekly option selling strategy with adjustments video is out now on Youtube!https://t.co/Bgxt3UXsar
— Aditya Trivedi (@itsAdityaT) June 13, 2021
A safe strategy to play a bearish view with low risk, high reward
The right way to execute a bear put spread for maximum
This is my favorite strategy to play a bearish view with extremely low risk and high reward.
— Aditya Trivedi (@itsAdityaT) July 27, 2021
Also sharing a high probability setup for playing out this bearish strategy.
Video is out now on Youtube : https://t.co/7P12Zby05B
More from Optionslearnings
Some Free videos available on our channel for option leaning:
Subscribe to channel:
https://t.co/pzyd1ju3i9
1. Basics of Option Greeks
https://t.co/zCgZOYfh38
2. Basics of Open Interest [futures]
https://t.co/gBEA7rouxV
3. Option buying full
4. Data Analysis in Excel
https://t.co/yhWjhdbOMG
5. Understand Gamma Risk
https://t.co/DVhOBGPM19
6. Option buying setup - strike selection
https://t.co/mgQVYJu8te
7. Yogeeswar Pal live trading
https://t.co/mtIJU5VYUl
@jitendrajain @yogeeswarpal
Subscribe to channel:
https://t.co/pzyd1ju3i9
1. Basics of Option Greeks
https://t.co/zCgZOYfh38
2. Basics of Open Interest [futures]
https://t.co/gBEA7rouxV
3. Option buying full
4. Data Analysis in Excel
https://t.co/yhWjhdbOMG
5. Understand Gamma Risk
https://t.co/DVhOBGPM19
6. Option buying setup - strike selection
https://t.co/mgQVYJu8te
7. Yogeeswar Pal live trading
https://t.co/mtIJU5VYUl
@jitendrajain @yogeeswarpal
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I’m torn on how to approach the idea of luck. I’m the first to admit that I am one of the luckiest people on the planet. To be born into a prosperous American family in 1960 with smart parents is to start life on third base. The odds against my very existence are astronomical.
I’ve always felt that the luckiest people I know had a talent for recognizing circumstances, not of their own making, that were conducive to a favorable outcome and their ability to quickly take advantage of them.
In other words, dumb luck was just that, it required no awareness on the person’s part, whereas “smart” luck involved awareness followed by action before the circumstances changed.
So, was I “lucky” to be born when I was—nothing I had any control over—and that I came of age just as huge databases and computers were advancing to the point where I could use those tools to write “What Works on Wall Street?” Absolutely.
Was I lucky to start my stock market investments near the peak of interest rates which allowed me to spend the majority of my adult life in a falling rate environment? Yup.
Ironies of Luck https://t.co/5BPWGbAxFi
— Morgan Housel (@morganhousel) March 14, 2018
"Luck is the flip side of risk. They are mirrored cousins, driven by the same thing: You are one person in a 7 billion player game, and the accidental impact of other people\u2019s actions can be more consequential than your own."
I’ve always felt that the luckiest people I know had a talent for recognizing circumstances, not of their own making, that were conducive to a favorable outcome and their ability to quickly take advantage of them.
In other words, dumb luck was just that, it required no awareness on the person’s part, whereas “smart” luck involved awareness followed by action before the circumstances changed.
So, was I “lucky” to be born when I was—nothing I had any control over—and that I came of age just as huge databases and computers were advancing to the point where I could use those tools to write “What Works on Wall Street?” Absolutely.
Was I lucky to start my stock market investments near the peak of interest rates which allowed me to spend the majority of my adult life in a falling rate environment? Yup.
