[Nitin Bhatia]

Hello members, I am creating this topic so that we may learn and write the algorithm or formula to calculate divergence between Nifty current value and Nifty fair value according to open positions.

What I understood till now is, on 20th September, when corporate tax rate cut was announced, that time even smart money was in loss, but as discussed earlier, that time Nifty had a big positive divergence so big upside movement was expected, this means when we start creating the algo for that we need to consider all open positions without considering who is smart money or not. Then we must start giving weightage.

For example- call buy can be with only one purpose that is a) market will move up

but call short can be for two reasons

a) either market may go down
b) or market will consolidate here only and premium eating can be done.

So accordingly we can give 1 weightage to call buy and we can give 2 weightage to call short. Thats what I can figure out till now, please everyone contribute their learnings and also sir throw some light on this. 🙏

[Nitin Bhatia]

First you need to find whether fresh positions or existing positions are getting closed. In same example, if fresh positions are built then the high weightage will be to call short and vice versa.

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