So here we go on the understanding of the Options Chains data for those who were not following my Previous thread. For the Experts it might see as baby steps. So the experts please forgive.
Understanding the Options Chain Data correctly : Forget what you know already about the market and the Option Chains data. The Future and Options are traded in the Secondary market. So the primary market is Equities. So without equities(cash market), Futures and Options do not exist. So for those who are trading purely in F&O, Look at the Futures and Options as someway to Protect your Stocks (Cash).
For the F&O market to exist, we need the Market Makers. And Market makers are also here to make some money.
Now going to Options Chain data. Let us take the Options Chain of NIFTY. Hope there are so many links for getting the Options Chain data. But I use the following link
http://www.nseindia.com/live_market/dynaContent/live_watch/option_chain/optionKeys.jsp?symbol=" & NSECode & "&date=" & ExpiryDate
For example to get the NIFTY Options data for the month expiring Jul-13, the link would be
http://www.nseindia.com/live_market...in/optionKeys.jsp?symbol=NIFTY&date=25JUL2013
So there are so many Columns and Values. What we are interested is the Following
OI - Open Interest
Chng in OI - Change in Open Interest
IV - Implied Volatility
Volume - Volume and Of course the
Strike Price
What do we need to make the decisions
1. Find out the Strike Price and OI, where we have the MAX OI in PE - MAX_OI_PE
2. Find out the Strike Price and the OI, where we have the MAX OI in CE - MAX_OI_CE
3. Find out the Strike Price and CHG in OI, where we have the MAX Change in OI in PE - MAX_CHGOI_PE
4. Find out the Strike Price abnd CHG in OI, where we have the MAX Change in OI in CE - MAX_CHGOI_CE
Intraday day trading would be based on
Change in OI
Positional/Swing trading would be based on
OI.