Hi Team,
I am learning to do the OI interpretation and i have the below queries.
on Friday(03/01/2025) from 9:20 to 9:45 I saw overall oi change on the put and call side is quite similar but the price was dropping. I need to know why this much drop happened.
Is it due oi change happened call side near ATM.?
Could some one tell how to interpret this.
This is just the first day. OI only becomes important when you get closer to the expiry.
A big put OI at 24000 level tells you that there are that many option sellers who are confident that the market won’t fall below 24000. Same for calls. The logic is that option sellers are supposed to be smart money who are better at predicting and even driving the market.
But it is only a theory, it often doesn’t work. IIRC Wednesday’s OI buildup was strictly against the 400 point upmove that happened on Thursday. And this was the expiry day, where OI was supposed to be the most relevant.
