Smart traders in the equity market prefer to trade in derivatives (Futures & Option ) segment. High net worth investors (HNI) also prefer to trade in future and option segment to protect their portfolio risk. Options are also used to the purpose of hedging of the high net worth portfolio.
By following the open interest and volume position of underlying stock or assets traders and investors can get a better prediction of the current strength and trend of the market.

How to read : Higher open interest in call strike option means the underlying stock may face strong resistance in that area of strike price. The more contracts added on to put option it may help the stock or nifty as strong support zone. When reading the open interest you should also consider that :
  • Increasing in price, along with volume and open interest you may see the prices will continue to rise.
  • When price are rising but volume and open interest falling you may consider the uptrend of nifty not sustainable on upper level and prices comes down again.
  • Declining in price with rising in volume and open interest means the week trend of the stock or nifty may continue.
  • When declining in price along with volume and OI means the index or stocks current downtrend is in process to drop the current momentum.

Nifty Option Open Interest Chart

Open Interest Increase Decrease Chart of Nifty

nifty option open interest chart