PUNJLLOYD option chart dec 2012
PUNJLLOYD option pain chart
what is option pain and what is its significance?
options are derived instruments and used mostly for hedging.but amateurs and low capital traders want to make huge money or returns through trading then in short time.
option pain means how option buyers suffering through losses.in market put option buyer lose all premium if underlying expires above strike price.call options buyers loss all money if underlying expires below strike price.
e.g.if nifty expires at 5800 then all put options below 5800 will expire worthless and on call option side all call options above 5800 will expire worthless.
If stocks/index are trading below the option pain value at expiry week, buy them for big gains!
option pain point decided who will be winner and who will be loser in market.
PUNJLLOYD option volatility smile chart
what is volatility smile and what is its significance?
volatility smile is a long-observed pattern in which at-the-money options tend to have lower implied volatilities than in- or out-of-the-money options.Volatility Smile is significant as it will tells you as an options trader is that there is bigger option trading demand for In The Money (ITM) options and Out Of The Money (OTM) options than At The Money (ATM) options especially when speculative trades are heavy near to expiration. Such higher demand drives the extrinsic value of options upwards through an increase in implied volatility.
PUNJLLOYD option put call ratio chart
what is put-call ratio (PCR) and how to calculate it and what its significance?
A ratio of the trading volume of put options to call options. The put-call ratio is best indicator of investor sentiment in the markets.generally higher call options trading means bullish sentiment of market or underlying security while higher put option trading volume indicate bearish sentiment of market. Generally, a lower reading (~0.6) of the ratio reflects a bullish sentiment among investors as they buy more calls, anticipating an uptrend. Conversely, a higher reading (~1.02) of the ratio indicates a bearish sentiment in the market. However, the ratio is considered to be a contrarian indicator, so that an extreme reading above 1.0 is actually a bullish signal, and vice versa.
PUNJLLOYD open interest chart
what is open interest and what is its significance? Open interest (also known as open contracts ) means open positions in markets that not settled yet.For each buyer of a futures/options contract there must be a seller. From the time the buyer or seller opens the contract until the counter-party closes it, that contract is considered ‘open’. There are always the same number of positions on either side of the open transactions( buyers and short sellers).An increase in open interest along with an increase in price is said to confirm an upward trend. Similarly, an increase in open interest along with a decrease in price confirms a downward trend. An increase or decrease in prices while open interest remains flat or declining may indicate a possible trend reversal.