Thread by @siddharth_2410

SOME KEY POINTERS ON OPTION CHAIN:
1. The first and foremost rule is we need to check OPTION CHAIN on DAILY basis. The prime problem with most of us is we wake up one fine morning and start analyzing by using the "STANDARD RULE" and apply the following logic

PRICE ↓ OI ↓ - Long Liquidation
Price ↑ OI ↑ - Long Buildup
Price ↑ OI ↓ - Short Covering
Price ↓ OI ↑ - Short Buildup
In short most of us consider these logic as "RULE OF THUMB" but actually they are not because these STANDARD RULES work when NEW POSITIONS ARE DEVELOPED

So the bottom line of POINT-1
- Make an habit of daily tracking OPTION CHAIN
-Apply STANDARD RULES when NEW POSITIONS ARE DEVELOPED and NOT when OLD/PRIOR POSITIONS are changed or played with

2. Whenever we are tracking NIFTY/BANK NIFTY OPTION CHAIN always start deducing from MONTHLY OPTION CHAIN followed by WEEKLY OPTION CHAIN where most of do a mistake is we ONLY track WEEKLY OPTION CHAIN and that's where chances of errors increases

So the bottom line of POINT -2
Track NIFTY/BANK NIFTY OPTION CHAIN in following manner:
"MONTHLY>>WEEKLY"

3. When you are tracking "STOCK/INDEX OPTION CHAIN" try to ensure that you are paying keen attention to:
- ATM CONTRACTS
-Highest OI
-Highest Change in OI

So the bottom line of POINT-3
Keep a track of ATM CONTRACTS>>Highest OI>>Highest Change in OI

You can couple the above mentioned ideas with "MARKET PARTICIPANTS DATA"

Hopefully above mentioned ideas will help you to decode OPTION CHAIN in much better manner in future
If it does and if you feel this was something "WORTH READING" .. PLEASE "RETWEET"