Disclaimer: This content is for educational purposes only, based on data as of 1 PM IST on March 17, 2025. This is not financial advice. Trading involves risks. Always do your own analysis and manage risk before trading.
Welcome to today’s F&O Insights newsletter! Whether you’re new to trading or building your skills, this newsletter breaks down Futures & Options (F&O) data to help you understand market sentiment.
Let’s dive in and make sense of the numbers!
Understanding Stock Activity Through OI Changes
First, let’s look at how traders are positioning themselves in select stocks.
| Underlying | Price | Change | Call OI Chg | Put OI Chg | Call Explanation | Put Explanation |
|---|---|---|---|---|---|---|
| BHARTIARTL | 1639.00 | 0.40% | -856 | 995 | Short Covering | Long Buildup |
| ICICIBANK | 1270.55 | 1.64% | 635 | 3853 | Long Buildup | Long Buildup |
| BAJFINANCE | 8536.55 | 1.38% | -1322 | 2304 | Short Covering | Long Buildup |
| INFY | 1584.70 | 0.28% | -1889 | 1289 | Short Covering | Long Buildup |
| HDFCBANK | 1709.50 | 0.16% | 309 | -410 | Long Buildup | Short Covering |
| TCS | 3483.10 | -0.81% | 2440 | 397 | Short Buildup | Short Buildup |
| RELIANCE | 1234.60 | -1.04% | 5669 | -614 | Short Buildup | Long Unwinding |
| ITC | 408.25 | -0.91% | 597 | 104 | Short Buildup | Short Buildup |
What Do These Terms Mean?
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Long Buildup: OI increases, often accompanied by a price move in the expected direction—up for calls (bullish) or down for puts (bearish). This indicates that traders are actively purchasing options, anticipating movement in that direction.
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Short Buildup: OI increases, but the price moves against the option buyers—down for calls (bearish) or up for puts (bullish). It often means traders are selling (writing) options.
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Short Covering: OI decreases, typically with a price rise (for calls) or fall (for puts). Short sellers are closing positions by buying back options, adding fuel to the price move.
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Long Unwinding: OI decreases, often with a price drop (for calls) or rise (for puts). Long holders are selling their options, signaling fading confidence.
Quick tip: Mixed signals (e.g., Short Covering in calls, Long Buildup in puts) can indicate hedging or a tug-of-war—dig deeper!
Spotlight on high-activity options
Next, we zoom into specific options with high trading volume compared to their OI. This can highlight strikes where traders are active, often signaling key levels.
| Contract | Volume/OI Ratio | Explanation | VOLUME | OI | IV |
|---|---|---|---|---|---|
| BAJFINANCE 8600 CE 27 Mar 2025 | 6.72 | Long Buildup | 17448 | 2595 | 24.34 |
| BAJFINANCE 8600 PE 27 Mar 2025 | 4.59 | Long Buildup | 5657 | 1232 | 28.4 |
| BHARTIARTL 1640 PE 27 Mar 2025 | 2.28 | Long Buildup | 5901 | 2590 | 21.96 |
| BHARTIARTL 1640 CE 27 Mar 2025 | 2.07 | Long Buildup | 4817 | 2331 | 19.89 |
| HDFCBANK 1720 PE 27 Mar 2025 | 2.38 | Long Buildup | 5885 | 2471 | 16.58 |
| HDFCBANK 1700 PE 27 Mar 2025 | 2.00 | Long Buildup | 8815 | 4406 | 17.38 |
| ICICIBANK 1260 CE 27 Mar 2025 | 3.34 | Long Buildup | 5823 | 1744 | 17.77 |
| ICICIBANK 1270 PE 27 Mar 2025 | 3.15 | Long Buildup | 5281 | 1674 | 19.4 |
| INFY 1540 PE 27 Mar 2025 | 4.19 | Long Buildup | 7460 | 1780 | 27.26 |
| INFY 1580 CE 27 Mar 2025 | 3.38 | Long Buildup | 9717 | 2871 | 24.22 |
| ITC 410 PE 27 Mar 2025 | 2.53 | Long Buildup | 2937 | 1159 | 21.24 |
| RELIANCE 1240 PE 27 Mar 2025 | 2.75 | Long Buildup | 11315 | 4118 | 20.2 |
| RELIANCE 1230 PE 27 Mar 2025 | 2.06 | Long Buildup | 5586 | 2707 | 20.36 |
| TCS 3500 CE 27 Mar 2025 | 2.77 | Long Buildup | 10022 | 3614 | 21.97 |
| TCS 3450 PE 27 Mar 2025 | 2.72 | Long Buildup | 4654 | 1708 | 21.78 |
How to understand Volume/OI Ratio
- What It Is: The Volume/OI Ratio compares today’s trading volume to existing OI. A high ratio means lots of new trades relative to open positions.
- What It Suggests:
- Above 2: Notable activity, possibly signaling interest in that strike as support/resistance.
- Above 5: Unusual activity, often tied to big expectations or event (e.g., BAJFINANCE’s 6.72 at 8600 CE).
- Low Ratio (Below 1): Less trading than OI, suggesting positions are being held or closed rather than new activity.
Why it matters: High ratios spotlight action zones. BAJFINANCE’s 6.72 ratio at 8600 CE screams unusual bullish activity!
Final Thoughts
Options data reveals trader intent—OI shifts show positioning, and high Volume/OI Ratios (like BAJFINANCE’s 6.72) flag unusual activity. ICICIBANK’s bullish signals contrast with TCS’s bearish lean, offering diverse opportunities. Pair these clues with charts for sharper trades.
Happy trading—catch you next time!
Disclaimer: This content is for educational purposes only, based on data as of 1 PM IST on March 17, 2025. This is not financial advice. Trading involves risks. Always do your own analysis and manage risk before trading.