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.
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.
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.
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.
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.
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