I am confused about the open interest data of options. In CNBC often the anchor says like there are addition of 5 lac shares NIFTY 10600 PUT, so it will act as resistance as people have bought put assuming NIFTY will not cross 10600 in near term.
My confusion is for the above 5 lac PUT Buyer, exactly 5 lac PUT Sellers are also there, who wants NIFTY to cross 10600, so that PUT premium goes down and they will earn profit.
SO, how to read this open interest data, as for every option seller there is a buyer too and vice versa, so open interest change means both side positions are taken by parties. So, how can we say the formula that - Price rise + OI Increase means Stock is bullish? Because a change in OI means both a bullish and bearish position is being made by 2 different persons.