Comment on Open Interest, MaxPain & Put Call Ratio(PCR)

Nilesh commented on 11 Jan 2017, 04:29 PM

Hi Nithin,

I had one observation that say for example when the nifty is rising and during intraday there is an huge increase in ITM PE OI.
Now this has different behavior on different days:
1) Nifty will fall during last hour of day thus rewarding the PE buyers and meaning smart money was buying ITM PE
2) Nifty opens gap down on next day and again good for ITM PE buyers.
3) Nifty goes up on next day and this time smart money was writing the ITM PE.

How do we identify these different behaviors and maximize our chances of winning. Also looking at such conditions it seems that people do buy options but more of ITM options. Please provide your inputs.


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