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What is ATM (AT The Money) Options?

ATM are those options having Strike near to Spot Price. Current Price and Underlying is near. Example : NIfty is trading at 16970 Put Option : 17100                    ITM 17000                    ATM 16900                    OTM ATM Option has Delta Value 0.50 why ??? Because Probability of Nifty going up or down from Current Price is 1/2 i.e. 50% Call Option : 17100                     OTM 17000                     ATM 16900                     ITM  For Option video : https://youtu.be/XbwnxRLp7L8 Exercise : Reliance : CMP 2200 Rs PUT Option : 1800 2100 2200 2500 Call Option : 2000 2100 2200 2400 You can Comment here for more updates and Query on any option related Topics.

What is Rollover, Open Interest and use

 What is Rollover ?

 "Rollover" refers to the process of closing out open positions in soon-to- expire contracts in favour of contracts with later expiration dates. Rollover is unique to each product, and it produces a substantial impact upon volatility and price action within the marketplace.

Example : Current Month is Feb 2021, While Next month is March 2021, so current month position cuts and create position in next month, i.e. March 2021.

 

What is Rollover Importance ?

 The main motive of rollover is to identify highest rollover stock and lowest stock position by analyzing Future Open Interest data. It shows where biggies is interested where money is flowing, and moreover where Operator is active. Operator is just group of people having common interest to take stock up or down.

 

How to identify rollover stock list?

 you need to download Bhavcopy of last 6 months, combine future OI of each stock in vertical format and compare highest rollover happening in which month.

 

What is Open Interest ?

Open interest name suggest those contract which is open either buy or sell. Open interest refers to the total number of outstanding derivative contracts that have not been settled. For each buyer of a futures contract there must be a seller. From the time the buyer or seller opens the contract until the counter-party closes it, that contract is considered open.  

 Types of Open Interest ?

Positive
Negative
No change

What is Positive Open Interest ?

Stock or Index is closing positive and above its day weighted average price is BULLISH
Stock or index is closing negative and below its weighted average price is BEARISH

What is Negative Open Interest ?
Stock or Index is closing positive and above its day weighted average price : Short covering
Stock or index is closing negative and below its weighted average price : Long unwinding

 what is NO change ?

Trend is not clear, wait for the direction

Various Type of Future OI status :


Long Build up :



Short Build up :


Short Covering :


Long Unwinding :




So, Rollover is one method where we can ascertain list of stock by analyzing Open Interest data and set the theme for the entire month. Example : If Suppose March Month 3-4 Stock came from FMCG sector or IT sector it will set theme for full month.

Will share List of stock came based on above method soon. 




 

 

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