major difference between stocks and index options and the information they induce
index has been widely held where has particular stock hasnt been widely held, so its more prone to market manipulation, when we track the smart money based on index options same must not bee true for stock options, infact logic should be opposite.one reason is i already stated above other is, liquidity, cuz of less liquidity stock options r not popular among institutional guys.
I observed sometimes there is jump in volume and open interest in 'at the money' stock options and subsequently there is big move in stocks, few years back saw it happen in ge shipping there was sudden fall followed by frantic buying making a bottoming tail at price chart and atm call option got active and within 1 month stock got double its price later on i found it happen on most stocks ( indianhotel was another example ) ..and no need to rocket science to understand the reasoning behind it, when there is price manipulation in one stock, there is often a syndicate of traders involved with the help of promoters, in old days promoter use to give his own shares to rig the prices ( interesting read in the classic ' reminiscence of a stock operator' ), conspiracy theory is ( as its cant be proved ), they sell the call options on the leverage of their own stocks and known syndicate members buy it from them and so is transaction involved....
what all above posted was in bull market, in bear market it doesnt make sense for promoters

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You want to be yourself, idiosyncratic; the collective (school, rules, jobs) wants you generic to the point of castration - Nassim Nicholas Taleb

@ alex
Very discerning point .

Stock derivatives are more prone to manipulators( in India we call them operators) than NF.
Take the ex. of Akruti Since Jan it's continuously being rising while whole realestate was in doldrums.
In March it has just got wings to rise.

It's Mcap is less than half that of DLF but due to lesser free float stock is being manipulated.

Thats why lot sizes of stock futures have been increased but nifty future has not been touched.

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Dont expect, just react..

NF pcr vol =.84
NF pcr oi=1.77

market is in OB zone, and unable to surge ahead.
if no positive clues from abroad, retracement is due.

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Dont expect, just react..

Originally Posted by mahesh2007

Stock derivatives are more prone to manipulators( in India we call them operators) than NF. Take the ex. of Akruti Since Jan it's continuously being rising while whole real estate was in doldrums. In March it has just got wings to rise. It's Mcap is less than half that of DLF but due to lesser free float stock is being manipulated. Thats why lot sizes of stock futures have been increased but nifty future has not been touched.

Akruti's price rise is the matter of short trapping and not stock rigging. few big players shorted in futures in jan on the news that co. is unable to repay it's loan to Berclay.
Co. managed it's way to repay and these biggies went on rollovering their positions.
on Feb 19, Akruti mgt. had pledged 3.2 million shares(7.12 % of total equity) probably to repay the loan.

Akruti had very little float (7.9 millions) in the spot market, which was traded so effectively to keep the spot price abreast of the futue.

This is evident from the fact that delivery % to total traded quantity was lesser than 10%( in the past few days it went bellow 5 %), when the stock skyrocketed).

promoters hold 90% of total equity. So when smaller player entered and tried to short the scrip, they had to face the auction to buy the stock at very high price.
This helped stock to soar new heights.

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Dont expect, just react..

superb inputs mahesh, serious manipulation out there

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You want to be yourself, idiosyncratic; the collective (school, rules, jobs) wants you generic to the point of castration - Nassim Nicholas Taleb

please note nf is hourly and oi pcr and nse vix is daily.
At the right edge of the chart vix is falling but oi pcr also falling which neutralize the combine effect, ideally we want vix falling and oi pcr rising to confirm uptrend.

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You want to be yourself, idiosyncratic; the collective (school, rules, jobs) wants you generic to the point of castration - Nassim Nicholas Taleb

made a flow chart a year back, posting here again

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You want to be yourself, idiosyncratic; the collective (school, rules, jobs) wants you generic to the point of castration - Nassim Nicholas Taleb

rare setup- nf close in red, vix gone down and oipcr rose up,
also before 2 days to expiry nf next series seems in tandem with spot, there is usually cost of carry math attached to next month series which is directly proportional to overnight lending rates in money market, which suggests still there is liquidity issues, on backdrop of this very less discount or premium ( cost of carry) is very unlikely...lets see

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You want to be yourself, idiosyncratic; the collective (school, rules, jobs) wants you generic to the point of castration - Nassim Nicholas Taleb

Option pain is where maximum pain lies for option buyers i.e. strike at which most option buyers will suffer loss at expiry of the series.Its been believed that strong hands/smart money/deep pockets who wrote options try to manipulate index in such a way that option buyers ( be it put or call ) suffer the losses, here 2800 strike is the option pain, 2800 ce is at 134 and 2800 pe at 5 rs so combine debit wd be 139rs, to make profit for option buyers nf must close either above or below 139 of 2800 i.e. 2939 or 2761 ...maximum loss for option buyers wd be if nf close at 2800

Option pain is 2800 strike..

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You want to be yourself, idiosyncratic; the collective (school, rules, jobs) wants you generic to the point of castration - Nassim Nicholas Taleb

I Liked this idea of tracking reversals in underlyeing with the HiLo in 21 Day MA of PCR Channel. As a matter of fact in the absence of proper volatility info in Indian market this could turn out to be a single important strategy. http://www.zealllc.com/2002/putcall.htm