Nifty 21-02-2018

Time 1 pm IST

Today Nifty showing strong Support at 10300 as more than 18 lacs Put got added to 10300 making the Highest OI 73.82 lacs at 10300 PE and Resistance at 10500 as 10 Lacs Calls got Added to 10500 making the Highest OI 54.84 Lacs at 10500 CE .

Looking to this Range February 2018 Expiry seems to be between this Range.

**Disclaimer

I am giving these readings for Educational Purpose. I request everyone that, please understand before taking a trade. I am NOT RESPONSIBLE for any Losses incurred by anyone taking trades based on my blogs. I and/or my Students may or may Not have position. MY ALL BLOGS WILL BE FOR EDUCATIONAL PURPOSE ONLY

Nifty 20-02-2018

At present highest OI in puts is at 10300 ( 62 lacs (16 lacs added)) and in calls is at 10500 (46 lacs). So as of now 10300 seen as strong support and 10500 as strong resistance unless the OI of put decreases or shifts to any other strike price

Jyoti Budhia

jyoti@ncfmtraining.com

9324473734

**Disclaimer

I am giving these readings for Educational Purpose. I request everyone that, please understand before taking a trade. I am NOT RESPONSIBLE for any Losses incurred by anyone taking trades based on my blogs. I and/or my Students may or may Not have position. MY ALL BLOGS WILL BE FOR EDUCATIONAL PURPOSE ONLY

Understanding Open Interest of Equity Futures & Options

Futures Open Interest

Open Interest total number of open or outstanding positions (not reversed or squared up ) in Derivative Contracts on a particular period for the particular month.

At present we have maximum trading of Equity Derivatives traded in National Stock Exchange of India Limited and all Equity Derivatives are Cash Settled.

So if :
1) Stock Price Increases and Open Interest Increases it is an Indication of Long Build up
2) Stock Price Decreases and Open Interest also Decreases then it is an Indication of Long Unwinding
3) Stock Price Decreases and Open Interest Increases , it is an Indication of Short Build up
4) Stock Price Increases but Open Interest Decreases then it is an Indication of Short COVERING.

If these type of scenarios are checked Continuously, one can get an idea of the Trend.

Options Open Interest in case of NIFTY

Options Open Interest (NIFTY)

PCR - Put Call Ratio is used to know the Open Interest in Options and the trend is known accordingly

On 16th February at the close of Market the PCR of Nifty was 

47,627,550   Total February Month open interest of Nifty puts divided by 57,620,025 Total February Month open interest of Nifty calls is 0.8266
Indication of Calls of Higher levels have been shorted (PCR less then 1 and Nifty Index falling).

In the Opening 10500 PE (symbol for Puts) was having the highest Open Interest of  above 67 lacs
and due to that prices were hovering around 10500 from 11.30am to 1.30pm, and Open Interest started unwinding slowly slowly from 10500 and we saw nifty falling speedily to 10434 and closing at 10452.

Now Monday 19th February will indicate the trend that Open Interest in 10500 Put is Increasing or unwinding and which will be the next support (where Open Interest in Puts will Increase) .

** In Expiry week PCR does not have much Relevance BUT Open Interest on Strike prices can give us an Indication of the price Movement of Nifty

Through this Blog , I , Jyoti Budhia will try to create as much Awareness I can in Options.

Jyoti Budhia
9324473734
jyoti@ncfmtraining.com