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)
11 comments:
what`s the logic beyond this
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
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
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
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
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
Tq very much
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
Tx.Shan
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..
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
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