open interest day trading strategy

to show the total number of open options on a particular underlying security, or more precisely it can be measured by the number of a specific type with a specific strike price. A new student to technical analysis can easily see that the volume represents a measure of intensity or pressure behind a price trend. When you place a sell to open order, you are writing new options contracts to be sold so the open interest would. And with this, I would like to conclude this module on Futures Trading. Many traders told me that they find it difficult to judge the range of nifty future for short term, so today I am here with an article that will teach you how to find that exact top and bottom range for complete.

Open Interest - How It Can Be Used in Options Trading



open interest day trading strategy

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Because of this, when you open a new position the number of contracts in existence could increase which means the open interest of them will. Sometimes both parties will be opening trades and increasing open interest, other times one party will be closing a trade and the other opening (no effect on open interest ) and other times both parties could be closing trades (dropping open interest ). This means, 20 contracts in system got squared off, hence OI reduces by 20 contracts. Highly liquid ones are generally easy to buy and sell, and orders will be filled quickly. Let me illustrate OI with an example. OI would now stands. After this transaction, there are 10 contracts in total with 10 on the long side (6 4) and another 10 on the short side; hence the open interest. .

open interest day trading strategy