The option chain on Kite, powered by Sensibull, now has historical OI analysis. You can now enter a time period and will be able to track how much the open interest (OI) on Calls/Puts on any particular underlying has changed over that period. Currently, the option chain can be accessed only on Kite web, but it’ll also be accessible from Kite 3 mobile, our new mobile app we’ll be launching soon. Until then, if you are using mobile to trade, you can log into https://sensibull.com to access this feature.
How is this of use?
Generally, it is assumed that option writers are the savvier traders as they deploy a lot more capital to take positions as compared to option buyers. An easy way to track which direction option writers are taking is to track the open interest (OI) data. OI going up meaning writers increasing their position size, and vice versa. Historical OI analysis tool helps you understand the OI trend.
- OI on Calls going up would mean option writers feeling bearish and hence writing call options expecting Call option prices not going up.
- OI on Puts going up would mean option writers feeling bullish and hence writing put options expecting Put option prices not going up.
While being on the side of option writers does not always work, this is a great way to detect support and resistance levels. Do check this Varsity chapter on Open interest and this one on PCR/Maxpain. Also, make sure to check out https://sensibull.com, it has everything and more for an options trader.