Option Chain is the most complex Analysis & is dependent on multiple variables like Premium, Premium Decay, Open Interest, Change in Open Interest, Implied Volatility, Volume, Strike Prices, etc. All these variables are analyzed for both PUT and CALL Side. Which makes it very difficult for the Trader to Analyze the Option Chain.
With the help of an Option Chain Indicator (OCI), you can easily find out the strength/weakness of the market the position of option writers i.e. who (Put/Call Writer) is creating fresh positions and who is closing their positions.
Rules & Conclusions based on OCI Indicator Chart
Option Chain Indicator only tells the strength & weakness of the Market.
- If the OCI Score is increasing that means Market Sentiments are Bullish.
- If the OCI Score is Decreasing that means Market Sentiments are Bearish.
- If the Market is Increasing but OCI Score is Decreasing means Up move will not sustain. And If the score start increasing then it becomes REAL Up Move.
- If the Market is Decreasing but OCI Score is Increasing means the Down move will not sustain. And If the Option Chain score starts Decreasing then it becomes REAL Up Move.
- If the Market is already Increasing and Score is also Increasing means Uptrend will continue.
- If the Market is already Decreasing and Score is also Decreasing means the Downtrend will continue.
- This is not a TRADING Indicator. It only tells the strength/weakness of the option chain.
- This indicator is for learning, educational, and informational purpose Only.
- Please do not initiate any trade based on this indicator. We do not recommend the use of this indicator for trading decisions.
- We do not undertake any guarantee or provide any kind of assurance on the accuracy of the results.
- We do not provide any tips, recommendations, or suggestions.
- Kindly consult your financial planner/investment advisor before making any investment or trading decision.