How is change in open interest used in intraday trading?
Open interest, as we all know, is the open positions of derivative contracts, be it futures or options, i.e. unsettled contracts. Now a large open interest at a particular strike price for an underlying like Nifty, BankNifty or stocks, suggest something doesn’t it. If its an OTM strike CALL OPTION then that’s a resistance and an OTM strike PUT OPTION, then that’s support.
Now we all know what to do, if resistance is breached or support is breached. The idea is how to go about spotting this dynamism. Quantsapp guys have a scanner for this. Now, let me give you a link which gives practical perspective on options intraday breakout scenarios etc.
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To understand when and what gets triggered….. watch this video, it makes loads of difference to one’s trading.
