I am trading in NEST platform. I wanted to compare prices of Tatamotors 410 CE and 420 CE using Snap Quote. Now I find some values for ‘Open Interest’ and ‘Total Open Interest’ headings. As i change the strike price, ‘Total Open Interest’ remains same, but ‘Open Interest’ changes. Can somebody enlighten me on what is ‘Total Open Interest’?
3 Likes
OI is the total no of open derivative contracts, higher open interest generally indicates liquidity and activity in the underlying.
Example: Each time you enter a nifty fut contract by buying 50 qty there needs to be counter party who is selling 50 qty, This act of you buying and the counterparty selling one lot together results in one open contract.
Popular platforms like NEST/NOW depict total OI as the overall open interest across a given stock, for EX Tata motors Total OI would constitute OI of all contracts, strikes, futures and options of Tata Motors together.
Whereas Open interest alone on NEST/NOW depicts OI on that particular contract alone, in your case 410/420 CE of Tata Motors.
6 Likes
You can see OI in NIfty option chain and that is a good indicator to trade. Total open interest never intrigued me.
2 Likes
As nik said, the point to be noted here is, it is the combined OI of ALL the derivatives [Futures& Options, both]. Thanks!
Quick question here, OI indicates liquidity in the "derivative’ or ‘underlying’?. I thought it was for derivative. Please clarify
Open interest means fight between loosers vs winners in trading terms . When put open interest increase (OTM put) (10% to 25%) and market is moving up it means market will continue to go up. So up till it faces a resistance. Overall sentiment is strong for current month. Also check open in OTM & ITM call and see at what strike price it increasing that may be your resistance. Open interest change every day during volatility so nothing can we conclude 100% till expiry. ITM call change in open interest should be negative during upmove.
Above all we should not predict anything but manage our positions as per market sentiments. There are many loosers who are ready to loose money till they start feeling pain and cut their positions.
Increasing in open interest means, loosers want to more and winners want to win more. If there is any change open interest start decreasing or there will be no change.
Hope I have made it clear. Trading need practice. Exception happens.
i want to download all the future stocks with % change data , volume , value , ATP , Open interest . at 3.30 pm and at 9 pm !
i want to download data of 3.30 pm and 9 pm ; because ; after 3.30pm ; the OI gets change and after 3.30 pm , the closing price also gets update .
how and from where do i download the data from?