The Observation on Open interest from my study-
1) For every option trade first order come from sell side, hence open interest increases only from sell side every time.
2) Now accordin to point 1 if Open Int. increases only from sell side then
--seller takes more risk than buyer of option
--seller have to pay margin on trade
--though seller having more risk he gets less benefit From the trade he made.
3) Question is though Seller get less benefit, high investment & risk why he sell the option and who are these sellers collectively?
I am opening this thread to collect openion of all option trader I also have some openion on this which I will share with this thread.
A) this is only for all of us who want to know more about Option Treading
B) My experiance is seller of option is getting more chances of profit than buyer
C) hands of seller of option are stronger than buyer of option.
D) from open interest of option we can ascertail nifty range for the short period like 5-10 days
pl share your views
1) For every option trade first order come from sell side, hence open interest increases only from sell side every time.
2) Now accordin to point 1 if Open Int. increases only from sell side then
--seller takes more risk than buyer of option
--seller have to pay margin on trade
--though seller having more risk he gets less benefit From the trade he made.
3) Question is though Seller get less benefit, high investment & risk why he sell the option and who are these sellers collectively?
I am opening this thread to collect openion of all option trader I also have some openion on this which I will share with this thread.
A) this is only for all of us who want to know more about Option Treading
B) My experiance is seller of option is getting more chances of profit than buyer
C) hands of seller of option are stronger than buyer of option.
D) from open interest of option we can ascertail nifty range for the short period like 5-10 days
pl share your views
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