How good are moving averages with options?

MAs are generally reliable with stocks, for investing or trading. Even for stocks which don’t have years of history, MAs generally work, because such stocks have at least a few months of history, excluding the recently listed ones.

But options, particularly weekly options, if bought 1 week before, don’t have any history, considering such weekly options have just a few traded days. I have checked them in real time, and they seem to work, need to check more.

So do MAs work with options, like they do with stocks?

@AlgoEye @Ashwin_kumar1 @Jason_Castelino @VijayNair @t7support and all others.

:question: :question: :question:

Only VWAP works on options as majority of positions build on intraday. As they are just contracts ,i don’t think moving Average makes any sense in options for multidays.


Yes, that is what I think. There is not enough history.

Yes saw people using VWAP.


Its not about history, leaps( dec options) has lot of history but options prices are not linear (based upon demand and supply) its function of 5 paramters( underline LTP,Strike, time to expiry, interest rate, historical volatility/IV) + demand and supply. All are dynamic in nature . MA is only on price which is kind of irrelevant for options as they are nothing but contracts on underline so price are dynamic.


Yes that is what I mean :no_mouth:

I was saying that, a the price movement is dynamic, particularly intraday which I am checking, may be it appears as though MA is working in real time, but not like with a stock, where a conclusion can be drawn. I have come to know about only the price part.

One important aspect of MA’s is that they are the good tools to track and capture the momentum of market…!

I have seen smaller period moving averages working really great to capture momentum and for a option buyer, momentum is everything…!

But applying it on option charts…even of weekly expiry…will not help to get something extra insight apart from what we can get in spot charts…

That is something new kind of thing…but it needs to be more thought about i think…



I have observed that, so want to know the opinion of experienced traders.

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@t7support :question:

MAs are trending indicators. So if the underlying trends roughly around 30-35% of the time, u have a good chance to make money. Otherwise when the market is flat of volatile u get whipsawed and typically absorb the losses.

MAs are lagging indicators. So you need certain number of price candles in the upside or the downside to confirm the movement after a price turnaround.

Rather than trying to use MA directly on options it may be better to use it on the underlying to do your analysis. As you noted the history is very limited for the weekly options. Getting a deep insight in to whatever strategy you are using therefore is not possible by directly applying the MA to weekly options.

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Yes, I am observing the candles too.

For trending days it looks predictable, have to check in real time for range bound sessions.

And I am applying MAs on Nifty, and if the index is falling, call is falling too, almost the same, as it is a weekly option.

But I bought put, so looking at index and seeing the opposite on the put option is difficult :grin:


Plain old VWAP showing its magic.


Can you name the indicator applied at bottom of chart, the divergence it is forming is looking interesting to combine it with vwap…!

Looks lije OI

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On applying OI on chart, it is showing no data available for the symbol (index or stock)…? How to work with it?

I got it. It is OI.

Did you check with NIFTY2311217800CE?

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OI means number of open contracts only relevant for FNO

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The indicator at the bottom is OI for the options contract.


In my view, instead of a single MA, EMA crossover is better (5 & 20).
5 minutes timeframe.

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EMA crossover on options, do you do that, but there will be many crossovers as price moves very fat.

Have you checked it ?
It won’t give multiple signals.

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