Tuesday, March 22, 2011

the instant technical indicator

if the ratio of
the turnover of
the top traded 2 put-options for the day
to
the turnover of
the top traded 2 call-options for the day
is between 0.80 to 0.99
or more than 1.30
the market is likely to remain buoyant!

if this ratio
is below 0.8
or between 1.00 to 1.30
the market is likely to slip!

(where to get live nifty call put values
http://nifty50options.blogspot.com/

to get call put values
http://nseindia.com/content/fo/foquote.htm

whereever turnover data is not available
u can use no. of traded contracts)
at

11 comments:

  1. vista consultantsMarch 22, 2011 at 11:33 AM

    what`s the logic beyond this

    ReplyDelete
  2. Er. Jagmohan SinghMarch 22, 2011 at 11:47 AM

    the logic is simple but powerful : that's the only way operators can trap the majority.

    for details u may also read

    http://thebestbusinessintheworld.blogspot.com/2010/11/interpreting-put-call-ratio.html

    ReplyDelete
  3. vista consultantsMarch 22, 2011 at 1:01 PM

    todays put/call ratio works around 1.03 @11.30 am lets see

    5400/5300 puts are the highly traded with turnover 933392 lacs

    500/5500 call are the hioghly traded with turnover 969773 lacs

    with best regards
    rajamani

    ReplyDelete
  4. vista consultantsMarch 22, 2011 at 1:58 PM

    hi shan,

    is it put divided by call

    then 933392/969773 then ratio works around 0.96

    or

    call divided by put (9697773/933392)then it works out o be 1.03

    kindly correct me ........

    getting confused...

    regards
    rajamani

    ReplyDelete
  5. Er. Jagmohan SinghMarch 22, 2011 at 2:57 PM

    dear rajamani
    it is put divided by call
    rather sum of no. of contracts (or turnover) of top 2 puts by the sum of no. of contracts (or turnover) of top 2 calls.
    regards

    ReplyDelete
  6. Dr.Sidharth AuroraMarch 22, 2011 at 8:28 PM

    Is the same logic useful in stock options also? How do we find turnover data of stock options.Is it same as "change in open interest"
    .pls.reply

    ReplyDelete
  7. vista consultantsMarch 22, 2011 at 8:29 PM

    Tq very much

    ReplyDelete
  8. Er. Jagmohan SinghMarch 23, 2011 at 2:10 PM

    dear dr.aurora,

    this applies to stock options also.

    instead of turnover, u can use no. of contracts/lots traded

    change in open interest is different and not to be used here!

    regards

    ReplyDelete
  9. Dr.Sidharth AuroraMarch 23, 2011 at 2:46 PM

    Tx.Shan

    ReplyDelete
  10. Dr.Sidharth AuroraMarch 26, 2011 at 3:38 PM

    23.3.2011 0.42 104.75 103.7 1.10% 66 1.20% Expected to slip tomorrow
    24.3.2011 0.41 104.75 104.75 0% 42 0.77% Expected to slip tomorrow Did not keep on high……..low 103.8 hiigh of 106.05
    25.3.2011 0.53 106.7 104.75 2.10% 131 2.30% expected to slip tomorrow ROSE LIKE HELL!!!!!!!!!!

    Sorry to bother you but this method does not seem to working with stocks..in this case RCOM..

    ReplyDelete
  11. Er. Jagmohan SinghMarch 28, 2011 at 10:41 AM

    dear dr.sidharth,
    yes, i noticed the aberration. it is apparent that this indicator, or any indicator for that matter, can't be followed blindly. 2 or 3 indicators in tandem are more accurate.
    when people driving the car give the left turn indicator but turn right, operators too can bull-doze the indicator.
    on a more serious note, indicators indicate the pressure and undercurrent. but there it is not a certainty. liquidity (courtesy retail investors driven by sentiments or courtesy operators driven by brute purchasing/dumbing power) can create a short-term tide!
    thru the article, i shared the concept which is based on logic. the concept is, though, vulnerable to forces.
    regards

    ReplyDelete