Trade with options data Part 2

puts and calls in the market are created by call writers and put writers

1.call writers write the call options and sell them in the open market with the intention that a stock price cannot move beyond a level and sell them at a particular price -- so if they see that the price of stock moving beyond a point they just want to cover up the open positions and close the contract and thus the oi decreases
so call writers are considered as generally having a bearish view

2.put writers write the put options with the intention that the stock price wont fall further down and then sell a particular contract at a strike price in open market so if the value of the stock is falling down they tend to cover up their open positions otherwise they will be in loss

so put writers considered to be having a bullish view


hope this solves u r doubts

Hi Kiran,

What is your view on TATAMOTORS? IMO, Options data does not seems to be providing any trend.

has to close my bearish positions due to intresting changes in oi at 5300 level, bought 5400 ce

Deutsche cuts SBI after 'one of its worst quarters'

SBI shares are down again by 0.8 percent at 1,872.50 rupees

What should I do - Sell or Hold?

my personal feeling is sbi will fall further even though options data dosent indicate much about the trend