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Data Base Trading Part -2 #NSE #BSE #OptionchainTo study an option chain, focus on the current market price, displayed in the centre. Analyse the built-up data to understand market direction based on recent changes in open interest and price. ITM call options are typically highlighted in yellow, making it easier to distinguish them from other options. Nifty option chain is considered to be the best advance warning system of sharp moves or break outs in the index. So, if you see an aggressive increase in open interest in puts, it is most likely being led by the institutions who are selling puts and it hints at a support level below which the market is unlikely to fall. The reverse interpretation holds in case of call options OI movement. You can position your trades accordingly.
NSE:BANKNIFTYEducation
by Optionclub
The limit lines of MarketMARKETS ARE HIGH AS A KITE : Historically, this acts as strong resistance for markets. Markets tend to reach this point when there is too much optimism around. This is the most dangerous level for investors in the market. Retail investors are extremely greedy here. Expect a bubble to burst soon. CRITICALLY HIGH : At this line, the markets are relatively too expensive and can show consolidation. Investors should show caution and stay fearful. MID LINE: Markets will oscillate above and below this line quite often. This line is a regular market trend. CRITICALLY LOW: With good hopes and optimism around, markets will stop consolidation over here. This is where we should be greedy. MARKETS ANNIHILATED: In 20 years' history, markets have reached this line only once. This is an extreme line and takes it as a lottery ticket. Prices extremely rarely will consolidate to this line, but when it does it might be the best time to invest in your lifetime. *This is a log graph of 20 years. Markets are never linear, they change in percentages relative to the last price which is not linear.*
NSE:NIFTYEducation
by WizSmash
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