Bank Nifty Option Chain

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Bank Nifty Option Chain

What is Bank Nifty Option Chain?

Bank Nifty Option Chain shows you a list of all available options, for the NSE index Bank Nifty. If you find different versions of Bank Nifty Option chain, don’t get confused. The way of presenting Bank Nifty Option Chain may be different but the data will always remain the same. So choose the presentation you are comfortable with and then begin with your analysis.

nifty-Option-Chain-OI

What does Bank Nifty Option Chain shows you?

As mentioned earlier, the Bank Nifty Option Chain shows you a list of all available options, for Bank Nifty. But there are two kinds of options: puts and calls. So the Bank Nifty Option Chain is divided into two parts: Put option contracts and call option contracts. Also these options can either be in the money, or out the money or at the money.

Put Option Contracts
  • When security price is greater than strike price, it is an out of the money put option.
  • When strike price is greater than security price, it is an in the money put option.
  • And when strike price is equal to security price, it is an at the money put option.
Call Option Contracts
  • When security price is greater than strike price, it is an in the money call option.
  • When strike price is greater than security price, it is an out of the money call option..
  • And when strike price is equal to security price, it is an at the money call option.
open-Interest

Bank Nifty Option Chain and Open Interest

Open Interest shows the total number of contracts, in the Futures & Options market, that are yet to be settled. To be more specific, it shows whether the flow of money in the Futures & Options market is increasing or decreasing.

Open interest is often used as an indicator of trend strength. Now when OI increases, it is usually taken as a suggestion that money is flowing in the market and the trend is likely to gain momentum or maintain its movement. On the other hand, when OI decreases, interpretations are usually made that the market is liquidating and that the existing trend is nearing to an end. Take a look at the table below.

  • There is strength behind OI, when both price and OI are rising
  • There is strength behind OI, when the price is decreasing and the OI is increasing.
  • There is weakness behind OI, when the price is increasing and the OI is decreasing.
  • There is weakness behind OI, when the price is decreasing and the OI is decreasing.

For determining OI, we only require OI data from either buyers or sellers, and not the sum of both.

Open interest can be a used as a tool to measure the market activities. Little or no open interest symbolizes that either there are no opening positions. High open interest implies that there are many contracts still open.

Many technical analysts have come to believe that the knowledge of OI can present important information about the market.

Volume and Open Interest

When we combine volume and OI, then volume will show the total number of securities that have changed owners in a one-day trading period. They can be, in the commodities market or in the options market.

open-Interest-and-Volume

Conclusion

  • Bank Nifty Option Chain shows you a list of all available options, for Bank Nifty.
  • There are two kinds of option contracts. Put and Call.
  • Options can either be in the money or at the money or out the money.
  • Bank Nifty Option Chain can have different presentations but data remains the same.
  • OI is the total number of outstanding derivative contracts that are yet to be settled.
  • For determining OI, we only require OI data from either buyers or sellers, and not the sum of both.
  • OI is equal to the total number of bought or sold contracts, not the total of both added together.
  • OI is a highly useful tool for traders that are trading in the F&O markets.
  • Little or no open interest symbolizes that either there are no opening positions.
  • High open interest implies that there are many contracts still open.
  • FnO is a zero sum game.
  • An increase in OI implies increase in money flows in the market. And decrease in OI suggests money flowing out of the market.
  • OI and volume are not the same.
  • When combined with OI, volume shows the total number of securities that have changed owners in a one-day trading period.
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