Option Pain, also known as Max Option Pain or Max Pain, is based on the theory that since most options buyers lose in options trading, the price of the underlying stock must be manipulated somehow to close during options expiration at a price that results in the most options contracts expiring out of the money.
Today there is a huge Open Interest Builtup in 5200PE April Strike price. Which indicates that Option writers are confident about holding 5200 for time being.
Here is a modified Nifty Options Tracker. PCR(OI) for current series had been added
for Nifty and Reliance Charts with auto update feature
Gain in Shorting 5100PE = Rs18.5
Loss in Longs 5200 PE = -Rs45.8
Gain in Longs 5200 CE = Rs4.45
Gain in Shorting 5300 CE = Rs16.9
Total Loss = RS5.95/Lot
Nifty Gained 30pts overall in 5 trading session till expiry. And you lost RS5.95/Lot = Rs 297.5
Ichimoku Indicator turned to buy for all the timeframes. Just Checkout the Nifty Futures Charts of 5min,15min,Hourly Charts
Ichimoku plays a great role in high probability trading. Let look into different setup of timeframe(Daily, Hourly,15min) and once can formulate his trade easily which side to trade and which side not to trade. I had applied the parameters(3,13,16) Ichimoku parameters to Nifty futures under various timeframes to determine a high probable trade.
People Started Covering their Open Interest position especially in 5200PE and 5300PE and no one likes to build a open Interest Position across the strike prices today as Expiry Season nears.
As there is a low volatility prevailing in the market and most of the bullish people are expecting a breakout either above 5300 levels. For those who people who are expecting a breakout above 5300 levels before expiry here is a safe strategy to practice. Its called Reverse Iron Butterfly Strategy. The reverse iron butterfly strategy is designed to take advantage of sharp swings in the underlying security
Most people believe that option players are extreme risk takers. After all, they purchase an asset with a very short life, and hope it skyrockets in value. Option buyers might make 500% or more if they buy the right option, just as they would do if they picked the winning horse at the track
Iam just very curious about the volatility distribution among the various strike price of Nifty Options. And From the chart it is observed that ITM(in the money options have low volatility when compared to OTM(out of the money options).
And Now we could track Price Vs Open Interest, Price Vs Open Interest Change Relationship easily. No need to read or listen to TV anymore. The picture of Open Interest, Open Interest Change, Price Change Tracker will tell you the actual happenings of the market.
Here is an another simple OI Change Tracking Chart for you to give a more broader picture to understand what is happening in the Index Option market.Nifty Options OI Change tracker will track the change in open interest for a particular day