Nitin Murarka is the columnist, Head (Research) at SMC Global. Derivatives have been his specialty for the past 18 years, as a CA. Data Interpretation, a field in which he specializes, includes both formal and quasi-statistical procedures. The options trading strategy that his prop trading uses is one of the most Successful that he has thoroughly tested!
- “Intraday Options Trading” in simple words would be when you trade stocks intraday; you buy and sell them within the same trading day. Before the market closes for the day, traders who engage in intraday trading must close out all of their positions.
- In order to profit from changes in the stock index, investors buy stocks rather than hold them as an investment.
“Special Note : Mr.Nitin Murarka appeared in a podcast about the Intraday Options Trading with Face2Face series, conducted by eLearn markets which one of the popular stock market education platform. We have taken some of the findings from the same podcast. In case our reader wants to read full podcast details or want to watch the video of the same, then he or she can also go to official site of eLearn markets.”
Due to content copyright issue, we will not using any table or chart from that podcast but we are trying to compile the information from that whole bunch of golden strategies given by maestro Mr.Nitin Murarka.
Let’s grasp the insights from that podcast and learn something new. There are many people who use and monitor this type of choices data, but we choose to use it for our own purposes.
So, let’s get a grasp on this scripting, shall we?
- If you’re performing intraday trading, you’ll need to be up and running by 10:30 or 11:00 a.m. at the earliest to take advantage of this information.
- You’ll be more reliable if you really look at the facts. Only taking the trade at 9:15 or 9:30 will not improve your accuracy. For better results, look at the morning data and place your order at or after 11:00 AM Eastern Standard Time (11:01 EST).
- Excel is one of the best program that will let you accomplish this task, which requires you to import and export information.
- Once you’ve established a starting point, you’ll then need to know the current market price and the previous closing price. You may observe the change in open interest right here. This is what happens on the call side, and this article or information is being about it from the call side.
- On the put side, we have the strike price, as well as the current price, and the number of open positions.
- In the remaining portion of this comprehensive report, Information will concentrate on describing how one might realize a profit from intraday trading.
- As a result of the introduction of intraday index options, the value of index options can rise from 50 to 100 within a single day, with the value of 100 then falling down to 50.
- Therefore, the intraday time frame is the one in which this model performs the best. The goal of this strategy, therefore, is to figure out how to generate a profit in the index on an intraday basis.
- Here, open interest is all you need to look at; open interest of calls and open interest of put options are all you need to pay attention to.
- There are seven strikes above and seven below the money if you grab the money at the 12200 mark. There must be equal strikes on both the sides, and then one needs to recalculate open interest change on the call side and also the total open interest change on the put side.
- Most clients buy options because they can’t afford to take on more risk than they already can, and because of this, they’re generating more volume on the buying side, therefore we’ve assumed that any shift in open interest is due to retail investors’ purchases.
- The shift of 49,00,000 in open interest can be attributed to retail investors’ increased interest in buying. These investors are more enthusiastic about the market. Additionally, if we notice a 54,00,000 movement in open interest in the put side, then can conclude that the general public is owning the put option. (Note: For tables and other data related info, please to official site of https://www.elearnmarkets.com)
- If FIIs, proprietary accounts, hedge funds, and arbitrageurs are all buying, then we may infer that the retail public is also doing so, and we’ll need to see if the market’s feelings lean toward buying or selling in order to confirm this notion.
- According to the data, retail investors are purchasing 54,00,000 put and 49,00,000 call options from the market. Rather of making an actual call, they are more interested in getting feedback from the selling side of the equation instead. (Note: For tables and other data related info, please to official site of https://www.elearnmarkets.com)
In the model as a whole, Mr Nitin Murarka is trying to make few key points clear. Before you can analyze data, you must first determine its direction.
- As long as the market’s data shows an upward trend, ours can be seen as well. We must wait for prices to be close to volume weighted average price (VWap) before we can make a purchase.
- When it gets within a reasonable distance of the VWAP, we make a purchase. You’ll have a chance like that number of time of the time when the price is near the volume weighted average price (VWap) or below.
- To get there, you’ll have to be a little more tolerant. While you may miss out some opportunities each week, but when you get a chance to use this technique, your overall threat is minimal because of this approach.
- We hope you got something new to learn. Our motive is to provide information and educate our readers. But we recommend readers to consult experts before making any investment decision.
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