Nifty futures trend finder tool, this online application can be used to find the trend daily. All you need to enter is nifty spot price and nearby out of the money nifty call and put option prices. Then it will display the probability of a particular trend if it is up or down. The driving criterion behind trend calculation is the difference between spot price and the strike price of the call and put option. Now, one side option premium is always more than the fare value and it will help determine the trend.
We know that options markets are dominated by the option writers. As they are the smartest traders amongst all, they will write options carefully. All the out of the money (OTM) options becomes worthless on the expiry. So writers make a lot of money, whereas the buyers will lose money most of the time, as future and options are always 2 people zero-sum game.
This nifty future trend finder uses this difference between the premium. It helps us to know which options are costly, the option which has more premium the near term trend should be in that direction. However, in this online tool, we are not considering the IV (implied volatility).
The accuracy of this tool is high enough to help traders determine the trend based on the Options open interest data. But options open interest and premium can change the near-term trend, so trade carefully. Always use technical charts to confirm the direction of the trend.
How to use Nifty futures trend finder:
- Enter Nifty Spot price.
- Enter the current price of the call option of the strike price. Strike price will be displayed when you enter nifty spot price.
- Then enter the current market price of the put option as displayed below.
- Just click on Find Trend button.
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