OrderFlow charts and Notes 27/11/14

[09:00]   r m : Good Morning folks!
[09:00]   r m : http://vtrender.com/levels-and-plan-for-2711-2/
[09:00]   r m : http://vtrender.com/premium/orderflow-charts-and-notes-2611/
[09:01]   r m : NF Hypo1 Above 8491➜8512➜8539 SL8469 & 8499 for move above 8512 Hypo2 Below 8468➜8443-8437 SL 8492 NOV Future levels
[09:01]   Porus : GM all
[09:02]   r m : BNF Hypo1 Below18000➜17941➜17905 SL 18041 Hypo2 Above18076➜18135 SL 18035 NOV Future levels
[09:03]   Shai : Gm all
[09:13]   Amit J : GM
[09:13]   Shai : pre open is flattish
[09:14]   Shai : more likely a 8468- 8514 kind of range early in the day
[09:15]   Sharad : GM all
[09:18]   Sumit : gm everyone
[09:23]   Shai : 8469 remins an imp supp all day for the bull
[09:28]   Shai : semi drive but vol under avg at open – so driven more by locals than OTF
[09:35]   Amit J : shai open int increased sharply in banknifty calls in last one week. any trades based on that
[09:41]   Shai : Amit can’t say for certain but could be partipants expecting a pull back
[09:41]   Shai : Point is Rate cut is priced in so even if it happens upside is factored in
[09:42]   Shai : and if it does not than downside open 🙂
[09:49]   Sharad : Shai should i hold CE 8500 bot @ 13 till end
[09:50]   Sharad : delta negative
[09:52]   Shai : looks range bound here for next 3 hours
[09:52]   Porus : Shai,why 3 hours?
[09:52]   Sharad : ok will take call around 12 and SL will be 8469
[09:53]   Sharad : 12 pm
[09:54]   Shai : yes 8469- 2 o be sure
[09:54]   Sharad : yes
[09:54]   Shai : we may work hypo 2 below that level
[09:55]   Shai : vwap falltening along wih the bands suggesting rangebound moves
[09:55]   Shai : even as we near the end of IB
[09:56]   Sharad : delta -200 is huge early morning
[09:56]   Shai : 8500 Nov should see 2 side writing now
[09:56]   Shai : already 15 L at the strike
[09:57]   Sharad : 8500 Ce 65 lac and PE 30 lacs
[10:00]   Shai : yes I was refering to the change since open
[10:03]   Sharad : lot of high value stocks crossing 52 week high
[10:11]   Kathir : Good morning Shai RM and all friends
[10:12]   Sharad : IB only 18 points
[10:15]   r m : Hi Kathir
[10:16]   r m : @Sharad, both PE and CE premium are being brought down so that less greedy writers can exit in profit 😀
[10:17]   Kathir : @RM ge any special lottery calls for today?
[10:17]   Sharad : ok RM
[10:17]   r m : I am view less but our friend Kris has bought 8400PE 🙂
[10:18]   Kathir : oh ok
[10:18]   Chiranthan : 8500 pe I think
[10:19]   r m : sorry, 8500PE
[10:20]   Kathir : ok
[10:20]   r m : He is expecting expiry between 8400-8430
[10:22]   r m : but he bought at 23 and already in 50% profits 🙂
[10:33]   Ravi V P : rm: How to attach image here?
[10:34]   r m : you can post on any image site like imgur.com or your google drive or dropbox and share the link
[10:34]   Ravi V P : Thanks
[10:34]   r m : welcome
[10:45]   r m : BNF goes to 17941, target1 of Hypo1
[10:45]   Shai : charts up?
[10:46]   r m : yes, working in jerks though!
[10:47]   r m : could be my ISP too
[10:47]   Shai : ok
[10:47]   Shai : sellers in Nov delta but reducing
[10:47]   Shai : buyers in dec
[10:48]   Shai : option writers have taken over
[10:48]   Shai : 8400 pe – 8500 ce safest now
[10:51]   Kathir : IT index 100 up
[11:01]   Shai : yes both indices on screen below vwap
[11:02]   Shai : seller dominaton in the intra day TF
[11:02]   Shai : buyers of the past 2 days at 8437- 8444 and 8467- 8473
[11:03]   Shai : On a slighty broader scale if that 8505 is not fully crossed those sellers of tuesday are still in the game
[11:22]   Shai : Hos of yesterday Manaksia up4% from 128 to 133 now
[11:23]   Shai : Today’s HOS – tex rail and titagarh likely to be up ahead of an investors meet called on dec 5 by rail ministry
[11:23]   Shai : MS, JP, HSBC Delloite all likely to attend to discuss FDI
[11:25]   Shai : TF of hold is till dec 4
[11:26]   Amit J : play in texmaco infra. it holds texmaco rail and benefit from delhi fsi rise
[11:27]   Shai : ok
[11:28]   Shai : dlf is down again to 149 after that news
[11:28]   Amit J : please check chat of this if possible. if this can be a multibagger. thanks
[11:28]   Shai : nse code?
[11:28]   Amit J : texinfra
[11:29]   Shai : thx
[11:30]   Shai : already up big
[11:32]   Shai : clear res at 52
[11:33]   Shai : potential 20 point upside to 72 abv 52
[11:33]   Shai : good buying opp at 46.3 or 45.4 if it comes in next 2 days
[11:34]   Shai : that 52 possible by Mon or latest by 4th
[11:44]   Sharad : Shai what do option writers do to control price in their favour …
[11:44]   Sharad : 8500 CE writers sold 78 lacs now
[11:45]   Sharad : so how price is contolled by them?
[11:45]   Sharad : tey sell futures too
[11:45]   Sharad : they
[11:46]   Chiranthan : I wanted to know this too. I thought options premium reflected futures price and not the other way.
[11:48]   Ravi V P : 8500pe writing too started at 32
[11:49]   Sharad : not much morning 25 lac now 26 lac
[11:50]   Ravi V P : see volume
[11:50]   Sharad : have to see open interest
[11:51]   Ravi V P : must see change in OI ,Volume along with OI
[11:51]   Sharad : i see Oi only
[11:51]   Sharad : OI
[11:52]   Ravi V P : 8500 28.45 -4.5 7025 2605700 463618 DOWN UP Short Buildup 0.333378113 SELL
[11:53]   Ravi V P : 0.334124504 8500 9.45 -4.50 -47.62 7,815,425 2,618,175 33.50 SHORT BUILDUP BEARISH 28.00 -4.95 -17.68 2,611,325 12,650 0.48 SHORT BUILDUP BEARISH
[11:53]   Sharad : did not understand
[11:54]   Ravi V P : strike LTP Net change change in OI Net OI Volume price change OI change Interpretation PCR OI
[11:54]   Sharad : so both are bearish?
[11:55]   Sharad : wxpiry near 8500 ?
[11:55]   Ravi V P : Option pain at 8450
[11:56]   Sharad : i do not understand much in this
[11:58]   Ravi V P : price,vol,oi: up ( bullish)
[11:59]   Sharad : so according to you sell 8500 CE and PE both
[11:59]   Ravi V P : Ravi V: price up ,vol,oi down: down ( bearish)
[11:59]   Ravi V P : 8500PE commands more premium than ce
[12:00]   Sharad : so…
[12:01]   Ravi V P : ITM writing is better than OTM
[12:02]   Sharad : so start writing 8500 PE .. so future will go up?
[12:02]   Ravi V P : time dcay just 3 hours
[12:02]   Ravi V P : decay
[12:03]   Sharad : ok
[12:05]   Shai : Sharad an option writer carries the same position as a future contract on expiry day if exercised
[12:06]   Shai : theorteically on expiry day it is the same as buying / seeling F after the close – hence the margin of 1 F contract is kept
[12:06]   Shai : Chiranthan both F and options are on the underlying which in this case is Spot
[12:07]   Sharad : Shai but how writers control price of underlying
[12:07]   Shai : There are options on futures contracts also on CME but not used here
[12:07]   Shai : From the exhange point of view it is the same as buying/ selling F
[12:08]   Shai : assume you sold 8500 ce for which 1 NF deposit got blocked- you bias is the same as the one who sold Nifty F at the same time
[12:08]   Shai : the effect on the underlying nifty spot is the same as exchange treats it as bearish F
[12:09]   Sharad : understood from the exchange point of view..
[12:09]   Chiranthan : ok
[12:10]   Shai : we are european style so exration day all have to be settled in cash
[12:10]   Shai : as we can’t take delivery of Nifty cash
[12:11]   Shai : But if trading silver or gold you have the option of giving gold or silver to mcx
[12:12]   Shai : that is also the reason why if option is ITM you have to settle it
[12:12]   Sharad : that is view from exchange side… but if option writers write 8500 CE more to control NF .. then FII can buy more futures to increase price of futures and give them more pain
[12:13]   Shai : yes – but if they are writing 8500 ce someone is also buying 8500 ce at other end on a diff timeframe
[12:13]   Ravi V P : generally option writers are FII with big packets
[12:14]   Shai : assuming I wrote 8500 ce at 100 20 days back and you look to sell 8500 ce today I will meake the trade with you as a buy to cover
[12:14]   Shai : for you it is a sell to open
[12:15]   Sharad : ok so FII wrote 8500 CE why they will buy futures to go up more than 8500
[12:15]   Sharad : right Ravi
[12:16]   Shai : FII are differnt entities each trading with a diff strategy not 1 body
[12:16]   Shai : if you look at RM’s excel they are buyers/ sellers and both at same time- hand in evrey pie 🙂
[12:17]   Sharad : ya FII mean big fishes who control prices with their mony poer
[12:17]   Sharad : power
[12:17]   Shai : true
[12:17]   Shai : they have deeper pockets and can remain in position when MTM is not in favor
[12:17]   Shai : retail will close out
[12:18]   Sharad : ok
[12:18]   Shai : as a stretgy they never close till expiry day an opened position in over 90% of cases
[12:19]   Shai : so is mkt is rising and 8500 ce is losing on MTM they will write 8500 Pe to offset the loss
[12:19]   Sharad : so they do not roll over?
[12:19]   Shai : they work the most on expiry day
[12:20]   Shai : see today’s sheet – you will find 70% of positions reduced
[12:20]   Sharad : so it looks they have written lot of 8500 CE so price not moving at all
[12:21]   Shai : could be – but I’ve know Fii’s to switch to next month contracts 5 days prior
[12:21]   Shai : This is HNI money writing on last day
[12:21]   Sharad : ok
[12:21]   Shai : and big investors who know they have not to bring additional deposit tom
[12:22]   Shai : plus STT is not there if you don’t cover
[12:22]   Shai : so even if you write 100000 contarcts of 8400 PE at 2/- yesterday you made 2L in 1 day
[12:23]   Sharad : yes if broker allow
[12:23]   Shai : some of them do on expiry day
[12:23]   Amit J : its generally done at brokers arbitrage desk
[12:23]   Shai : yes
[12:24]   Shai : on big accounts
[12:24]   Sharad : ok
[12:24]   Sharad : so now we can not expect any fireworks till end
[12:24]   Chiranthan : suppose there is heavu OI buildup at 8500 ce , then the bears feel comfortable to short nifty and therefore the market doesn’t breach 8500?
[12:25]   Ravi V P : but write 1 lac pe,you need 30lacs or brokers help to mint 1 lacs in one day
[12:25]   Shai : true Ravi- It’s small capital for large accounts
[12:26]   Shai : these days HNI’s are 10CR plus
[12:26]   Sharad : wow
[12:26]   Shai : Yes Chiranthan that position can have a forwrd effect like you said
[12:27]   Sharad : from morning it seems range is 8484 to 8470
[12:27]   Chiranthan : so options imact spot and futures prices indirectly?
[12:27]   Chiranthan : as a reaction of participants to the OI in options?
[12:28]   Shai : put another wau Options OI + Futures OI impact nifty spot- the underlying
[12:28]   Shai : *way*
[12:28]   Chiranthan : ok
[12:29]   Sharad : Shai but what about 95 lacs OI in futures … are they ready to accept expiry here or they will do anything to get more?
[12:30]   Ravi V P : some may rollover or leave it to the exchange to settle and renter later
[12:32]   Shai : Sharad the OI which remains back is complex- I think RM has written to Nse about them many times but we don’t have answers
[12:32]   Shai : It is a very large OI at the close which goes unsettled month after month
[12:32]   Sharad : ok
[12:35]   Amit J : why not settled in t+2
[12:36]   Shai : the F?
[12:37]   r m : there must be some cost benefit in settling at expiry, else such huge OI would not have remained at expiry
[12:37]   Shai : Rm correct me but it has been in the region of 70000- 100000 contracts right?
[12:38]   Shai : and that was on 50 lot size
[12:38]   r m : I think so, not very good at remembering numbers 🙂
[12:40]   Amit J : partly tax is the reason… capital gain shift
[12:41]   r m : but shift wll be there only for rollovers, anything left unsettled will be settled at today’s spot closing price, is’nt it?
[12:42]   Amit J : yes people trade in deep out of money for tax purpose. shifting of losses
[12:42]   Amit J : which is unsettled.
[12:42]   Shai : Amit any news expected in tataglobal from starbucks?
[12:42]   r m : yes, but that is very tiny fraction of the whole volume in options
[12:43]   Amit J : yes rumor of merger and starbucks bews
[12:43]   Amit J : news
[12:44]   Amit J : i feel stock will perform now by dec end
[12:44]   Shai : announcemnet likey today
[12:46]   Amit J : if it comes than 220 very fast
[12:49]   Amit J : nifty breaks 68
[12:53]   Chiranthan : can enter shorts here for NF?
[12:54]   Janak : till 3.15 pm now bullish?
[12:55]   Janak : dec bn 125 prem
[12:56]   Shai : Chiranthan short small qty with sl abv vwap
[12:57]   Shai : exit when you see a green
[13:00]   Janak : shai pl put dec chart also – maybe there is a green?
[13:00]   Janak : bn
[13:02]   Kathir : @shai bnf 17740 below 17905 is still there?
[13:02]   Shai : on 2nd screen
[13:02]   Shai : Kathir looks diff
[13:03]   Janak : lets play expiry guess guys: mine is 18100 / 8520 in Nov
[13:04]   Sharad : 8480-85
[13:04]   Kathir : ok shai ..any views on setlmnt price from here for both
[13:05]   Janak : 8550 also might come?
[13:08]   Ravi V P : 8498.75-8507.40 18068-18116
[13:14]   Janak : 8500ce around 5 looks good here?
[13:28]   Porus : Shai, what are CAirn levels for today?
[13:39]   Janak : shai 8500ce at 4 is a good buy for 20-25?
[13:43]   Ravi V P : Janak: It is OTM CE.Even if Nifty spot touches 8600 at 3.15,it will be still out of time value
[13:44]   Janak : i thought if nf touches 8500 – it will become 15-20?
[13:44]   Ravi V P : 8450ce may be
[13:45]   Janak : atleast 10 may come?
[13:45]   Janak : there is an IB trade 8474-91
[13:45]   Janak : bn jumps 50 pts
[13:48]   Ravi V P : time value 4.25 for8500ce
[13:49]   Janak : now it is 6 ravi
[13:49]   Janak : from 4 to 6
[13:49]   Sharad : 8500 CE 90 lacs
[13:49]   Janak : if nf does 8500 – it will hit 10 i guess
[13:50]   Ravi V P : yes
[13:51]   Shai : cairn can go to 278
[13:51]   Porus : ok
[13:53]   Janak : it went upto 7.75 ravi
[13:53]   Janak : almost double
[13:55]   Janak : i made around 6k with the combo of 8450pe + 8500ce
[13:55]   Janak : not much compared to u big guys but as rm wud say – Bhagte chor ki……
[13:58]   Ravi V P : option to be bought when vix is low and sell when when it is high
[14:01]   Janak : any- lottery shai?
[14:03]   Kathir : @janak good trade man
[14:04]   r m : @Janak, Congrats man! Chor in birthday suit now? 😀
[14:05]   Janak : 🙂
[14:10]   Janak : looks like expiry at 8477 🙂
[14:11]   Janak : jeena yahan…..expire bhi…..
[14:12]   Ravi V P : Nifty and BN both came into buy mode
[14:13]   Shai : BNf can do 18076 abv 18030 sl of 18002
[14:20]   Anay : NF facing resistance at yest VaH
[14:20]   Sharad : This is i think mildest expiry of 2014
[14:28]   r m : @Sharad, we had this one in August, huge 30 point range 🙂 http://screencast.com/t/nczETi5lbj1D
[14:28]   Janak : (14:13) Shai :BNf can do 18076 abv 18030 sl of 18002
[14:28]   Janak : this trade is active now
[14:30]   Janak : shai bn dec can do 18200 at the same time
[14:30]   Shai : yes
[14:31]   Janak : that green of is super strong in dec
[14:31]   Shai : NF dec looks good for 8569 cmp 8542
[14:38]   Shai : 8536 sl
[14:41]   Shai : BNF/ NF long trades looking to get stopped out
[14:42]   Chiranthan : bnf sl hit
[14:43]   Janak : yesterday’s replay
[14:43]   Shai : NF also gone
[14:44]   Janak : my dec bn sl at vwap is till survived
[14:44]   Janak : but looking at pink of….
[14:45]   Shai : that push abv vwap bands did not produce the short covering effect
[14:45]   Shai : yes all well till vwap holds though
[15:00]   Shai : 8500 pe wilting
[15:00]   Shai : still 21L of OI left
[15:00]   Rahul G : shai this suggestes last minute rise
[15:00]   Shai : reduction since morning
[15:00]   Rahul G : ?
[15:00]   Ravi V P : 320 became 20.T is 10
[15:00]   Ravi V P : 32
[15:01]   Ravi V P : 16 now
[15:01]   Ravi V P : 13.5
[15:01]   Shai : Can’t say Rahul- but thse giuys must be in profits hence open to the idea of holding for last 30 mins
[15:01]   Shai : could have written 100 plus
[15:01]   Ravi V P : 10.60
[15:03]   Ravi V P : time to cover fully at 10.10
[15:12]   Shai : Tiimid expiry hour
[15:12]   Shai : to and fro between 8500 and 8468
[15:13]   Ravi V P : they aimed that 32 to become 0
[15:13]   Shai : Dec starts with 8500 dec alsmost double of 8500 pe and price is 8500 spot
[15:14]   Sharad : 8500 CE 1.16 crore hahaha
[15:14]   Shai : 50% added today
[15:15]   Sharad : yes opening 55 lacs
[15:15]   Shai : what was the opening price?
[15:15]   Sharad : 15
[15:15]   Shai : great
[15:15]   Ravi V P : 8500pe 41 8500ce 16.90 crushed to 0 finally . option market
[15:16]   Shai : 8500 pe was 41?
[15:16]   Shai : I think i was near 24-26
[15:17]   Amit J : look at dlf dance
[15:18]   Sharad : still at 0.15 p people are selling
[15:18]   Sharad : 1.20 crore OI
[15:18]   Ravi V P : guestimate:13:08 Ravi V: 8498.75-8507.40 18068-18116
[15:19]   Shai : Nice on Ravi
[15:20]   Shai : now flat line at 8492
[15:21]   Sharad : I think expiry was fixed from Monday itself…
[15:21]   Ravi V P : SGX Nifty settlement price is based on 3-3.30 p.m price of NSE.
[15:23]   Ravi V P : [email protected]. to make it 0, we need 8499-8507
[15:23]   r m : yes, weighted average price for last 30 minutes
[15:26]   Shai : 15.37 L left at 8500 pe
[15:26]   Shai : down from 20 L 10 mins back
[15:26]   Ravi V P : nifty spot 8506
[15:26]   Shai : lol
[15:26]   Shai : weighted avg will be below 8500
[15:26]   Shai : last min games
[15:27]   r m : 8493
[15:27]   r m : wma
[15:27]   Shai : ok
[15:29]   Sharad : bye all
[15:29]   Shai : 8595
[15:29]   Shai : 18022
[15:29]   Shai : Bye all
[15:29]   r m : Thanks and bye folks, have a great evening 🙂
[15:29]   Shai : Have a nice evening
[15:30]   Ravi V P : bye
[15:30]   Anay : bye all
[15:30]   Kathir : BYE ALL
[15:33]   Porus : bye