Dear option.Trader
(1)What is Positive OI and negative OI in call options and put options ? please give the definition.
(2)and what is difference between Positive OI and negative OI ? and how one can identify Positive OI and negative OI in call/put options ?
Regards
Pav
It depends on the Price action and OI
For eg
Like today which saw a huge unwinding(a.k.a -ve OI) in 5700PE with an increase in option price, means all the bulls ran for cover and writers squared off their position as they dont think 5700 will hold. Sentiments have turned negative, usually a bearish signal
On the other hand, OI built up in 5700Ce(+ve OI) with a fall in price indicates call writers have written the call (bearish view) as they think 5700 is capped
Hope this clears... dont worry, just follow the post and after a few day's u will be able to make the same judgement call.. its simple and gives a feel of crowd sentiments