As
per Today's Movement of Bank nifty we ascertain some point of earning money in
this sort of market.
As
per MAX PAIN THEORY Read Here MUST Bank nifty Lowest Pain was near 27500 Level, But level doesn't
sustain for much time, and the fall came to market was very big and painful for
investor. Almost 300 point crash came instantly once the 27500 level broken and
all PUT seller came to square off Position to cut loss.
On
21st Aug. 27500 Strike Put close was almost 47 Rs, while open Interest was
huge, Once level broken the sharp sell came due to rush of option seller, The
27500 PE multiply 10x in a day, It was the reason.
The
market was down and open interest also goes down shows the wind up of position,
For Option holder of 27400, 27300 and so on made huge gain almost 10x plus in 2
hours of time. Highest gain made in strike of 27200 almost 1500% rise in 2
hours. Even morning it was trading near 10-12 Rs.
Learning
of Today's Move:
If
you closely tracking MAX PAIN THEORY then following would be outcome.....
- BOUGHT PE once MAX PAIN level broken
- SELL
FUTURE of
- SELL CE option from 27500 to 200 POINT far from SPOT of Bank nifty
Even
trader can easily do wonder's once trend is clear. Nifty is in Down trend so
Short CE from MAX PAIN level like Sold CE of 27600 around Rs. 150 as close was
200 but High price is 190 Rs.
Always
Short Opposite side of movement and MAX PAIN level is support to identify level
of position.
Moreover,
Open interest is key indicator for trader, where huge open interest lying at
any strike touches, it always create big panic due to rush of seller to square
off position as soon as possible.
Try
to analyze weekly option continuously keep track on open interest movement. Even at 27000 Strike shows support for market,
As huge open interest was there today and seller successfully able to close
above it. almost 8 lakh plus open interest added to that strike and option expire
worthless.
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