Nifty 50 Point Strike Interval Option Open Interest Chart

    Posted by Ashish Sankhla on 0

    To increase the liquidity in the nifty, NSE has recently changed the price interval from 100 to 50 for nifty index option. further in this post you will see the option open interest statistical chart of 50 strike interval.
    before showing current market option open interest position, let understand the basic of open interest in future and option trading.

    What is Open Interest : Open Interest (OI) is the number of outstanding contracts (which have not been closed) that remain for an expiration month. Open Interest only applies to futures and option trading.

    When fresh contracts are executed, that did not previously exist, futures or option open interest will increase.
    This means that a investor "A" must take a long position and a investor "B" must take a short position in their trade.


    Nifty Option Open Interest Chart with 50 point Interval






    Change in Open Interest of Nifty







    Concept of Open Interest

    When it comes to open interest, each derivatives expiry starts with the same number of contracts – ZERO.
    A new futures and option contract expiration month is opened for trading. Currently, no one has bought or sold a contract in futures or option segment.

    A Investor ("A") buys a Nifty option contract, but in order for this to happen, someone will have to execute their trade in sell side. Therefore, for every buyer there is an equal and opposite seller (Investor "B"). When this transaction occurs, the nifty option open interest is increased from zero to one. There is now one contract outstanding for the expiration.

    Investor ("C") decides to sell a option contract and subsequently another Investor ("D") has to buy that option contract, therefore open interest is now at two.

    Now Investor ("A") executes their trade and sells his/her nifty option contract. Investor ("C") decides to buy back his/her short option contract. After the transaction takes place, Investor ("A") and ("C") no longer owns a option contract. Effectively, the open interest for nifty option has one less option contract outstanding. Now the option open interest went down to one.

    What is Strike Price

    In options trading, the strike price is the fixed price at which the underlying stock or index can be bought or sold under the terms of an option contract.
    For instance, if spot price is 6029, then strike price may be 5900, 5950, 6000, 6050, 6100.
    Some trader refer to the strike price as the exercise price.



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