I have been building an options analytics app and I would like some feedback.
Most options tools show you what an option costs. What they do not tell you is whether that price is high or low compared to what the option normally costs. My app is built around that one question. For every strike, it compares today’s option price against the last two years of prices for that same instrument, so you can see whether you are paying more than usual or less than usual.
The reason this matters is simple. If you are buying an option, you want to buy it when it is low-priced. If you are selling one, you want to sell it when it is high-priced. Some tools help you with this, but most do not.
These are some of the things the app does today:
Scan all NSE F&O names at once to find where options are unusually cheap or unusually expensive right now.
Use one-click scans that answer a common question without you having to set up any filters. For example, which names have the cheapest calls today, or which names have been quiet recently.
Check any trade you are about to place, and see whether each leg is priced high or low compared to its own history.
See what happens to your profit and loss if the index moves up or down and volatility rises or falls at the same time, shown in rupees.
Compare the same view priced as different structures. For example, if you are bullish, compare buying a call against a bull call spread.
Get an alert when an option on a name you follow becomes unusually cheap or expensive.
Look at your open positions and see how the pricing has moved since you entered. This one is not built yet.
Which of the above would be useful to you? And which is useless to you?
In my experience, JS needs to buy options first before moving the cash market. So if it is unusually expensive, it means it’s going to be even more expensive very quickly.
Wouldn’t selling at tops cause option prices to reduce? Only after they sold at the top will they bring cash market down. Keyword being “unusually”, i.e., without a corresponding rise or fall in the cash market. Also timing helps - expiry days or close to the expiry.
There were two main strategies—quiet expiry and violent expiry. In a quiet expiry, they would sell a huge number of options to drive their prices to absurdly low levels—options were dirt cheap. Then, they’d ensure the market didn’t move, so those short positions remained profitable. No matter the news—war, trade conflict—they kept the market still. The intent was always to profit from artificially suppressed volatility.
In a volatile expiry, they’d buy massive amounts of call options, making them extraordinarily expensive. Then, in the second half of the trading day, they’d deliberately push the market in the direction they’d bet on—upwards or downwards—ensuring those bets paid off. They weren’t just anticipating moves; they were manufacturing them.
Thanks for responding. I generally don’t view IV or IVP in isolation. I also look at skew (how low/high IV is compared to ATM IV) and a few other volatility metrics/ratios. I also check how these metrics/ratios had been changing in the past few sessions.
For eg, if expensive ATM IV + IV expanding, maybe I won’t sell the straddle.
