When trading in options, knowing the mood of the big traders can give you an edge. If you come to know in which contracts the big traders are adding or diluting their positions it becomes an advantage.
An option writer always has an advantage. The time is always in his favor of the writer and using the Nifty option change in open interest graph it can be improved further.
We have created a Nifty Option Change in Open Interest Chart, which will show the real-time addition and dilution in open interest. It will show all the strike prices where there is a change in the open interest. Using this open interest data a trader can find excellent trading opportunities, especially by writing options.
How to use Change in OI Chart:
- Check the Nifty Options Open Interest Chart. There you will find the range of nifty using the highest open interest.
- Now see if these highest open interest strikes have addition or dilution in open interest. If there is an addition, then more traders are believing these levels will hold on and they are confident. In case of dilution at these high open interest strikes, then there are chances nifty will break this range.
- If the call open interest is rising and put open interest is declining. Then the Nifty is expected to trade lower.
- If the put option open interest is rising and call option open interest is declining. Then the nifty is most likely to trade higher.
- If both call and put option open interest is declining, then Nifty is likely to see wild moves in either direction. During such event, it is the best time to buy call and put options with long straddle strategy. In other cases, we keep writing (selling) options.
[LIVE] Nifty Option Change in Open Interest Chart:
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