Nifty Option Chain: Change in Open Interest

Explaining Nifty Change in Open Interest

Meaning of “Change in Open Interest”:

1. Change in Open Interest is equal to net increase or decrease in Open Interest for a particular option.

How to interpret “Change in Open Interest”?

1. Nifty Open Interest” or “Nifty Change in Open Interest” are two very reliable indicators to identify the ST direction of the market.

2. When the smart money is bullish, they usually start writing Puts. And when the smart money is bearish, they prefer writing calls.

3. Change in OI” can also be used to identify approximate support and resistance levels. If the OI has increase for 7500PE the most then it will imply that the option writers consider 7500 level as a strong support. On the other hand, if the highest increase in OI is for 7500CE, then it implies that option writers consider 7500 level as a strong resistance level.

4. The Option writers are generally the market participants with deeper pockets compared to option buyers.

5. For more accuracy in predicting the ST direction, this chart should be read with “Nifty Options Traded Volume” and “Nifty Open Interest Chart Live”

6. If the OI increase is low but the volumes are heavily traded for a particular option then it will imply some underlying uncertainty in the camp. e.g. if the 7500PE has highest traded volume but slight increase in OI then 7500 will not act as a good support.

{ 17 Responses }

  1. Nifty Open Interest” or “Nifty Change in Open Interest” are two very reliable indicators to identify the ST direction of the market.

    what is meaning of ST MARKET…? IT IS NEXT DAY MARKET OR LIVE MARKET /CURENT MARKET..?

  2. I am trading in nifty option intraday only and I am using RSI indicator and follows trend. for ex if the trend is up then buy the call option at rsi 30 level and should exit at RSI 70 level but it may change depending upon so many factors so its better that to have some points in pockets so exit early. at the same time look the graph of exponential moving average and support resistance level. so could you guide me regarding.

  3. Writers of options are mostly experienced, then how come the today (on 14-june-2016) Nifty June Put options 8100, 8200, 8300 OI reduced heavily when those are at high price ?

  4. As per your explanation on PCR ratio, if today’s pcr ratio is staying below previous dayclosing PCR, that means market is likely to be berish and vice versa.
    Can you guide where to find PCR ratio of the earliesr day at NSE site or at your site?

  5. apparently for past few days, the data shown on this page (showing live OI change) is showing incorrect values…compared to live data seen on NSE website….and the difference is not minor..it seems data here is stuck on some random day…kindly check and rectify…thanks

  6. clearing browser or resetting chrome settings has not helped…status remains same even today…kindly rectify ..thanks

  7. Today the live chains of open interest are not working…I have been waiting for hours to get the data populated…but no success

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