From 9:15Am continues falling price of 21800PE and Oi increasing 3M - 8M,
but after 2:30PM short seller there position, and OI decrease 8M - 5M, but same time how price also fall.
Basically, I understanding if shortcovering happning, price should go up,
I’m Begginer can any one please guide me.
In the case of 21800 PE, as nifty was consistently going up and as OI consists of both buyers and sellers:
A possible explanation of OI going down along with premium can be due to put buyers exiting their positions and option sellers who sold at highs covering their shorts to shift to higher levels (Possibly 21900) after 2.30 p.m
One has to also see the overall addition and unwinding of both calls and puts throughout the day at multiple strikes and if we see the overall data, we can see that the overall OI decreased in the immediate strike prices on the call side, there was addition of OI at higher strikes on the put side (more put OI addition at 21900 PE than 21800 PE)
@Jason_Castelino and others who track OI , what are your thoughts on the question by @Sameer_Mathan?
I belive when both buyer and seller, create new position OI get increase, and same when buyer and seller exit there position OI get decrease,
and price only change base on market order placed, correct?
if this case, after 2:30 oi start decreasing, means buyer exit there position and seller exit there position.
and price change based on market order.
but question is from day start seller was dominated price, that means sellers have hloding there position from morning,
and buyer exited there position on SL price, and new buyer buy, existing buyer’s contract.
after 2:30 seller’s exit there position. that means seller losing there domination, if seller stop domination, and exit holding position, it’s consider they buying it back at market price(mostly), price should be go upward, or stay sideways.
let me know, if i’m wrong, @Meher_Smaran @Jason_Castelino
not necessarily, if there is a huge spike in buy orders and there is panic to get out there will be short covering. In this scenario, the Option writer is trying to exit uncontrollably in scarce supply. So price will rise and most likely OI will drop.
But if in the case you mentioned, the underlying is mostly rising, then its more like unwinding(profit booking) where the Option writers want to close position by absorbing the Sellers in a staggered manner. So Buyers will keep lowering buying price(while closing / reducing OI). Also, the PE buyers who earlier added to the buy side and helped OI go up are getting out. (so now long buyers are panic selling)
So OI and price is both going down.
Usually, option writer will buy back thereby reducing OI in this case if they are rolling up like trying to sell higher strike price or expecting volatility later and booking profits.
As written by Meher, its clearer when you look at the entire option chain instead of specific strike.
Most of the things are already covered by Meher and Chirag.
I believe you have no doubt in OI increasing throughout the day and put losing premium because put sellers were ready to sell it at any price.
About premium falling along with OI. Now this depends on who is folding first. From the data you have shared clearly put buyers who had bought intra day puts, may be expecting a fall like yesterday, had to close it at the end of the day. And they were closing at any given price. And sellers were happy to book good profit.
So it was more of profit booking by put sellers.
There is no reason for short covering in 21800pe as nifty was going higher. Why would an option seller panic and cover their position.
Bro if you serious abt trading stay away from OI and random YouTube crap which people have used to sell there courses online 
OI data of Indian indexes is a joke created to fool retailers
Let me escalate this further to offend people. 
Don’t you think TA as a whole is a joke? 
Sorry brother didn’t get what is TA?
But you know what’s even funnier? The stock market itself is a joke. Think about it: Imagine you’ve set up a successful shop in one part of town. You’re making good money, and suddenly someone offers to buy your business at a premium, leaving you with the option to start all over in a different area. Sounds a bit ridiculous, doesn’t it? Yet, that’s essentially what happens in the stock market!
TA is technical analysis
Everything works sometimes, nothing works all the time. Same goes for fundamentals 
Then you are in the right direction. 
So when I speak against technicals, that makes me a fan of fundamentals.
This is like if I speak something against Modi, I am Rahul Gandhi Fan. 
Who is serious here. Just don’t be sensitive to get offended by the joke that hits you hard. Laugh along. 
I didnt say your Funda fan, you implied that
Bcos Fundamentals and Technicals are two sides of a polygon. Maybe you hate both and do Astro, or maybe some other form
Also, you could be RG fan, its your wish but there are more options here as well.
I’m a fan of both TA and FA but know that eventually money/risk management rules
I toss a coin. 
