Should the OI be zero at 3:58 because now everyone has closed their positions and there is no open active position now? If you mean the net change is -5 then I guess the number should be 0 in the preceding slide (when B and C made the close and open trade)
7:20 Can you explain what you mean when you say the 4DTE and 46DTE Options are the "standard monthly expiration cycles"? I am confused by that. What does that mean?
@@Mrvikramhb Sorry, my question wasn't clear. I knew what DTE means. I was confused by the "standard monthly expiration cycles" part. Though I'm not too sure anymore why. Looking back at the video I think he just meant most people tend to gravitate towards those DTE options if I'm not mistaken. I may have been overthinking what he was saying.
@@nathanielsmith6065 In our National Stock Exchange NSE (India - Nifty) option trading.. we have weekly option expiry with 4 days to expire (so 4 times each in a month) and 3 monthly options expiry (30 day, 60 day and 90 day).. all these open interest, PCR OI, PCR Volume makes sense for weekly option expiry than last day of a month expiry cycles. In India weekly expiry 4 DTE is very popular, Actually people play here like casino on the weekly expiry day.. if u have right skill u can make 3 or 4 times easily... however we lose most of the time due to fast theta decay.. but using this OI tool we can go against the time and play our game by buying option contract for the same day expiry at a much cheaper price and try our luck to exit on the fluctuation.
Thanks for the video!! Question: how do I know if the opent Int is a buy a call or sell a call? Assuming that I want to be where the big orders are and no against them. Thank you!!
Hi, Since open interest accounts for all open contracts (which requires one person to buy and one person to sell), then open interest tells us the number of option contracts that people are long and short. For instance, if open interest is 1,000 for a call option, that means 1,000 people bought that option as an opening trade, and 1,000 people sold that option as an opening trade. I hope this helps.
I dont mean to be offtopic but does any of you know of a trick to log back into an Instagram account..? I somehow lost the account password. I would love any tricks you can give me.
very well explained. what I don't fully understand is when someone sells an option does it create a new contract or are they selling an existing one? the term 'options writing' sometimes replaces the term 'options selling', is there any difference between them?
Hi Guy! When someone sells an option, somebody else has to buy it. There's a counterparty to every trade. To my knowledge, option selling and option writing are the exact same thing. There are lots of overlapping terms in options trading, which makes it quite confusing sometimes.
Hi, quick question about volume. Is it expressed in terms of "number of contracts" or "total dollar value of all contracts"? Ive heard you should always make sure there's about 40 times the volume of your position when you open a position, but that doesn't mean much unless i know which they're talking about. Great stuff, man!
Volume is the number of contracts / shares traded in a given day. I’m not sure where you heard that but it’s an interesting theory. Basically they’re saying if you trade 10 option contracts or 10 shares, the volume should be at least 4,000. In general, the more volume the better. If you stick to trading popular stocks and ETFs then you won’t have a problem
@@projectfinance OK. thanks for being timely with responses btw! one more question on the subject, when I see a volume of, for example, 1K (i.e. 1,000), should i interpret that as A) 1,000 individual contract, each representing 100 shares, or B)10 individual contracts, each representing 100 shares for a total of 1000 shares in volume? Im fairly certain the answer is A, but that would be a costlly mistake, so im confirming. Great stuff here, man!
It's A for option volume. Option volume has nothing to do with shares, only the number of option contracts that have traded that day. Share volume is the number of shares that have traded that day. They are separate and don't factor in the position's total value (such as share price x # of shares).
Mike, Option volume will start at 0 and increase throughout the trading day as each respective option contract is traded. You should not observe option volume increasing after the market is closed since standard equity options stop trading at the market close. I believe open interest is only updated after each trading day (or only a couple times per day), but I could be wrong. I hope this helps! -Chris
BUT IF OPEN INTEREST IS THE BALANCE OF LEFT CONTRACTS AND VOLUME JUST ADD ALL. THEN VOLUME SHOULD ALWAYS BE HIGHER THAN OPEN INTEREST ? WHY I SEE VOLUMEN MUCH LESS TAHN OPEN INTEREST IN MANY CASES?
Volume resets at 0 every day as it tracks the number of contracts today only. Open interest does not reset to 0, rather it adjusts to the new open interest level each day.
This is DEFINITELY THE BEST EXPLANATION of options contracts volume and interest !!! I finally get it !! :)
Great to hear! Thanks for leaving a comment!
-Chris
Should the OI be zero at 3:58 because now everyone has closed their positions and there is no open active position now? If you mean the net change is -5 then I guess the number should be 0 in the preceding slide (when B and C made the close and open trade)
Finally someone who explains option basics that are understandable. Thanks for doing a great job!
Mark, thank you so much for the kind feedback!
I'm glad the explanations are understandable. That's the goal!
-Chris
@@projectfinance how to see daily open interest chart of sp500 options.Where u get those charts
What does buy 5 contracts to close mean
Extremely concise and helpful, appreciate the guidelines
No better option channel on TH-cam
Thank you!
where can i get change in open interest data from'
Absolutely excellent Tutorial
Thank you sir. You explain things so clear
Thanks for the comment!
do you have video on unusual volume activity? thanks and more power!
7:20 Can you explain what you mean when you say the 4DTE and 46DTE Options are the "standard monthly expiration cycles"? I am confused by that. What does that mean?
DTE days to expire
@@Mrvikramhb Sorry, my question wasn't clear. I knew what DTE means. I was confused by the "standard monthly expiration cycles" part. Though I'm not too sure anymore why. Looking back at the video I think he just meant most people tend to gravitate towards those DTE options if I'm not mistaken.
I may have been overthinking what he was saying.
@@nathanielsmith6065 In our National Stock Exchange NSE (India - Nifty) option trading.. we have weekly option expiry with 4 days to expire (so 4 times each in a month) and 3 monthly options expiry (30 day, 60 day and 90 day).. all these open interest, PCR OI, PCR Volume makes sense for weekly option expiry than last day of a month expiry cycles. In India weekly expiry 4 DTE is very popular, Actually people play here like casino on the weekly expiry day.. if u have right skill u can make 3 or 4 times easily... however we lose most of the time due to fast theta decay.. but using this OI tool we can go against the time and play our game by buying option contract for the same day expiry at a much cheaper price and try our luck to exit on the fluctuation.
I love your videos. Very helpful!
Are you referring to stock volume or options volume?
Options volume.
Thanks for the video!!
Question: how do I know if the opent Int is a buy a call or sell a call?
Assuming that I want to be where the big orders are and no against them. Thank you!!
Hi,
Since open interest accounts for all open contracts (which requires one person to buy and one person to sell), then open interest tells us the number of option contracts that people are long and short. For instance, if open interest is 1,000 for a call option, that means 1,000 people bought that option as an opening trade, and 1,000 people sold that option as an opening trade.
I hope this helps.
What is open and close?
Is there a way we can find out if open interest has increased or decreased since previous trading day ?
I don't know of a trading platform that shows that metric
@@projectfinance isn’t it an important metric to form bullish vs bearish view ?
??
6:20 Very interesting. The liquidity's at the 5's
which charting platform you use to find out Volume in 100s and open interest in 1000's ?
Thank you very much for that great explanation!! You definitely know your stuff. 😊
I dont mean to be offtopic but does any of you know of a trick to log back into an Instagram account..?
I somehow lost the account password. I would love any tricks you can give me.
08:22 Summary, thanks.
You're welcome!
very well explained.
what I don't fully understand is when someone sells an option does it create a new contract or are they selling an existing one? the term 'options writing' sometimes replaces the term 'options selling', is there any difference between them?
Hi Guy!
When someone sells an option, somebody else has to buy it. There's a counterparty to every trade.
To my knowledge, option selling and option writing are the exact same thing. There are lots of overlapping terms in options trading, which makes it quite confusing sometimes.
thanks for the info
Hi, quick question about volume. Is it expressed in terms of "number of contracts" or "total dollar value of all contracts"? Ive heard you should always make sure there's about 40 times the volume of your position when you open a position, but that doesn't mean much unless i know which they're talking about.
Great stuff, man!
Volume is the number of contracts / shares traded in a given day. I’m not sure where you heard that but it’s an interesting theory. Basically they’re saying if you trade 10 option contracts or 10 shares, the volume should be at least 4,000. In general, the more volume the better. If you stick to trading popular stocks and ETFs then you won’t have a problem
@@projectfinance OK. thanks for being timely with responses btw! one more question on the subject, when I see a volume of, for example, 1K (i.e. 1,000), should i interpret that as
A) 1,000 individual contract, each representing 100 shares, or
B)10 individual contracts, each representing 100 shares for a total of 1000 shares in volume?
Im fairly certain the answer is A, but that would be a costlly mistake, so im confirming.
Great stuff here, man!
It's A for option volume. Option volume has nothing to do with shares, only the number of option contracts that have traded that day. Share volume is the number of shares that have traded that day. They are separate and don't factor in the position's total value (such as share price x # of shares).
does volume and open interest decrease when the market is closed. iv looked everywhere online and cant find an answer
Mike,
Option volume will start at 0 and increase throughout the trading day as each respective option contract is traded. You should not observe option volume increasing after the market is closed since standard equity options stop trading at the market close.
I believe open interest is only updated after each trading day (or only a couple times per day), but I could be wrong.
I hope this helps!
-Chris
HOW CAN OPEN INTEREST BE HIGHER THAN VOLUMEN
BUT IF OPEN INTEREST IS THE BALANCE OF LEFT CONTRACTS AND VOLUME JUST ADD ALL. THEN VOLUME SHOULD ALWAYS BE HIGHER THAN OPEN INTEREST ? WHY I SEE VOLUMEN MUCH LESS TAHN OPEN INTEREST IN MANY CASES?
Volume resets at 0 every day as it tracks the number of contracts today only. Open interest does not reset to 0, rather it adjusts to the new open interest level each day.
❤️❤️❤️