Open Interest Analysis

[Jayakumar.int]

Is open interest truly relevant, or is it just another overhyped trading metric?

yes its relevant when combined with charts powerful short term trend indicator..........

 

[Jayakumar.int]

 

[kajalnigam]

Is it possible to use open interest analysis to distinguish between speculative and hedging activity?

 

[Jayakumar.int]

Is it possible to use open interest analysis to distinguish between speculative and hedging activity?

yes possible, retail oi are mostly speculative while oi of FIIs and DIIs are for hedging, but there will not be much use in distinguishing between speculative as FIIs to change their hedge positions according to market movement.....

 

[Jayakumar.int]

 

[Mishra_86]

yes its relevant when combined with charts powerful short term trend indicator..........

Thank you for sharing your viewpoint. It's encouraging to learn about the value of integrating technical analysis with charts and powerful short-term trend markers. Your insights are much appreciated!!

 

[kajalnigam]

yes possible, retail oi are mostly speculative while oi of FIIs and DIIs are for hedging, but there will not be much use in distinguishing between speculative as FIIs to change their hedge positions according to market movement.....

Could you please explain the topic a little more thoroughly?

 

[Jayakumar.int]

Could you please explain the topic a little more thoroughly?

Retailers mostly buy or sell for a movement of 200-300 pts in Nifty while FIIs Hedge for a trend or an event, if you take current scenario Nifty had gained nearly 1000 pts from its recent low's of 18800, around that time FIIs positions in derivatives were longs 10% while shorts 90% as of yesterday they are longs 20%, shorts 80% which means they are yet to cover their shorts. As per my assumptions they are waiting for the results of state assembly election which is due on Dec 03rd 2023, so this is event based hedging, so if market reacted positively to election results there may be heavy short covering.

As FIIs play a major role in open interest its better to follow their activity.

 

[Jayakumar.int]

 

[kajalnigam]

Retailers mostly buy or sell for a movement of 200-300 pts in Nifty while FIIs Hedge for a trend or an event, if you take current scenario Nifty had gained nearly 1000 pts from its recent low's of 18800, around that time FIIs positions in derivatives were longs 10% while shorts 90% as of yesterday they are longs 20%, shorts 80% which means they are yet to cover their shorts. As per my assumptions they are waiting for the results of state assembly election which is due on Dec 03rd 2023, so this is event based hedging, so if market reacted positively to election results there may be heavy short covering.

As FIIs play a major role in open interest its better to follow their activity.

Thank you so much....for explaining everything so well.