Options and Volume Analysis

#1
Hi,

What does drastic volume increase entail? Let's consider nifty options. Let's say volume for 10000 PE is 2 lacs at 10am. At 10.30, let's say the volume is 5 lacs (More than double in half hour). Does that mean many people are buying 10000 PE at that point? Which means it's supposed to go up?

Regards,
P
 

mohan.sic

Well-Known Member
#2
Hi,

What does drastic volume increase entail? Let's consider nifty options. Let's say volume for 10000 PE is 2 lacs at 10am. At 10.30, let's say the volume is 5 lacs (More than double in half hour). Does that mean many people are buying 10000 PE at that point? Which means it's supposed to go up?

Regards,
P
hi platosaurus,
Such volume spikes happen sir. Reason I can tell you something and another person can say other. But all this reasoning you get in your mind and from others is only a possibility and speculation.
No one knows the real reason factually.
But from what I saw in few months of data is, such sudden spikes in OTM options lead to no consistent
outcomes. Yes sometimes they move towards the strike and sometimes they don't.
Also another point to note is the seller in these volumes. Imagine the money power to absorb such buying.
So it could be someone big taking the other side also. Or it could be a Hedged leg of something much bigger trade volume happening on other strike or future. We do not have the scope to track its underlying intent.
 

praveen taneja

Well-Known Member
#3
Hi,

What does drastic volume increase entail? Let's consider nifty options. Let's say volume for 10000 PE is 2 lacs at 10am. At 10.30, let's say the volume is 5 lacs (More than double in half hour). Does that mean many people are buying 10000 PE at that point? Which means it's supposed to go up?

Regards,
P
It can be writing also for that you have to look on other things also like trend news flow and mainly where retail traders are betting Jai Ram Ji Ki
 

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