[Nitin Bhatia]

FOR TODAY(03.05.2019) ITC OPTION CHAIN …IV IN CALL SIDE AT 305 STRIKE PRICE IS 19.93 AND AT SAME STRIKE PRICE AT PUT SIDE IS 34.72… WHY THERE IS THAT MUCH OF DIFFERENCE … AND WHAT CONCLUSION CAN BE MADE BY THIS OBSERVATION

[Nitin Bhatia]

Dear Mukti268,

as every stock have different IV Data, i will suggest you to save daily option chain of your watch list as suggested by NB sir after 7pm …..do it this regular basis…..and analysis the data everyday with chart,time decay & all your observations ….start with paper trade first…..this for FNO Stocks only

Regrads
Ankur

[Nitin Bhatia]

for option chain Kindly watch NB sir Option chain series too…… if you dont have knowledge of FNO stocks and OC

[Nitin Bhatia]

I humbly request, kindly do not post any aggressive comments or comments bullying others. I have deleted two such comments. Everyone has their own point view and let everyone express their opinion freely. I will share my opinion on the query raised.

[Nitin Bhatia]

IV is the measure of fear factor. High IV on put side means bears are more fearful compared to bulls. The reason being, they are expecting the stock price to move higher.

[Nitin Bhatia]

Thank u so much sir for your answer… And sorry from my side to you and to Sharma Ji also…

[Nitin Bhatia]

Guru ji agar high IV rhe on call side to kya bulls are more fearful then bears and they expecting the stock price is going down plz suggested me guru ji

[Nitin Bhatia]

yes but there is no upper or lower limit of IV. It is qualitative conclusion.

[Nitin Bhatia]

Sumit ji,

Yes, in previous weeks IV has given this signals 3 times (premium decay was also favoring direction)

* Two times IV was high to 26 compare to 19 on PUT ATM>> market was down in last hour

* One time IV was lower to 5-6% compared to 13 on PUT ATM>> Market relly 70 points in last
hour.

I booked profit in thrice of this with IV excel sheet & premium decay analysis.

[Nitin Bhatia]

Dear Hiren ji,

it will be help full to every one if you can explain how to record the IV in excel sheet.

Many Thanks….

[Nitin Bhatia]

Dear Hiren ji,

Do you consider IV in atm contracts and compare the difference between ATM call and Put , along with premium decay. ?

[Nitin Bhatia]

You may consider ATM and near ATM on OTM side.

[Nitin Bhatia]

Thank you. One last doubt, what if the iv in similar price? like atm call 20, and atm put 22 kind like that. how to concluded it?

[Nitin Bhatia]

Neither bulls nor bears are clear about the direction.

[Nitin Bhatia]

See for ATM at 12:30,

Live market example:11600 ATM IV is at 19% at call side & 12% at put side,

This is signal of market will fall today from here, premium decay also support for fall from here.

[Nitin Bhatia]

Ya got it. Hiren bhai.

so usually in NIFTY, how much % difference you see before make decision? i know its qualitative conclusion. but still if its more than, more chances of getting success right?

[Nitin Bhatia]

IV @ 11600 decreased to 15.85 on call side &15.11 on put side
Looks down fall might not be drastic

[Nitin Bhatia]

I have a query.
Why is it that even when the IV on the Put side on ATM strike was more than IV on the Call side on the ATM strike, the market fell?
I thought the market should go up because the Put IV was more compared to the Call IV.

I would be highly obliged if someone can please clarify.

[Nitin Bhatia]

You cannot conclude just based on IV. You have to check premium decay also. Besides that smart money should be betting in that direction.

[Nitin Bhatia]

Thanks Nitin Ji for the clarification.

So, in a nutshell, we need to analyse the IV of ATM call and ATM Put and also the NetChange of Call and Put.
Am I right in my understanding?

And for Nifty Intraday positions, how to calculate the smart money positions? Is it related to Change in OI and Volume?

Thanks & Regards,
Anirban Deb

[Nitin Bhatia]

Smart Money positions can be checked with the help of OI and Volume.

[Author]

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