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Old 20-07-2017, 11:52 AM
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Originally Posted by rvlv View Post
SHREES

I think one solution is having a good data feed like gfdl or truedata for options and then track on chart price-volume-open interest.
price vs volume/openint holds one master key.

increasing v/opi ratio has a bell curve or inverted v shape.
it runs from 0 to 5 or 10 then tapers down.
but price is a exotic option just halts a while and takes off to 10 times or 20 times or 30 times.

Here we need more clues on how to utilise delta or vega & gamma as JJ pointed out. I have no idea about this obscure zone.

Request JJ to kindly guide us .

As far as OI and Volume are concerned you are right . That is the trigger.

But Action on trigger has to be made in the context of the
RATIO of Implied Volatility to Historic Volatility .


Voltailty( in short Volty) has a nature to regress to mean.

If that ratio is high Naked Shorting or Credit Spreads are advised.
If that Ratio is low Naked Longs or Debit spreads are advised.
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Old 20-07-2017, 12:00 PM
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There is a certain nuance to decipher , in order not to make it complicated.

That is most of the time sudden high volumes are generated on options by insiders.
They buy in extreme low volty . By the time they have finished buying, Volty has already risen. In that context average trader can still profit by buying or selling the underlying, as the case may be.

Because after all they have shown their intent and they will be benefitted only when the underlying moves . So do we.
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