Comment on STT Trap - Options Expiry - NSE BSE MCX-SX
commented on
11 Oct 2014, 07:09 PM
Very nicely explained article it will be helpful for the traders, trading in options as a buyer. I am new to this post i will be very thankful to you if you answer my query. Once I bought an in the money call option of jpassociates lot size [email protected] at that time there was no open interest in this contract even after my buying also but as soon as i sold it lot size [email protected] it started showing open interest 8000 in nse web site and also in my trading software.
My query is that if i bought some one would have sold it so why it didn’t show open interest while my buying? But as soon as I became a seller and other side there must be a new buyer as i think so because if the old seller buys (squares off) it the open interest becomes 0. Can you explain me the reason behind this. If you can it will be a great help to me.
Note : i bought CE [email protected] at 10:15 am and sold [email protected] at 2:20 pm and it was the only trade on that whole day in that particular contract and it was an expiry day also.
Step 1 : Mr. A sold 8000 and I bought 8000 so OI would be 8000 but it was 0.
Step 2 : Now I sold 8000 and Mr. B bought 8000 so OI would be 8000 and it was 8000.
Step 3 : If I sold CE 8000 and Mr. A bought CE 8000 back then OI should be 0.
In my view first 2 steps were present there on that day 3rd step was absent because after closing the market OI was 8000.
I held my position for nearly 4 hrs. but OI was being shown 0 and when I sold it, it started showing OI 8000.