OI is high - IV is high - The view is Market will continue in the trend (Bullish or Bearish)
OI is high - IV is low - The view is Market trend will reverse (if Bullish reverse to Bearish, if Bearish reverse to Bullish)
OI is low - IV is high - what is the view?
OI is low - IV is low - what is the view?
Do we have to consider this at the Strike-Price at which we are planning to take the trade (call or put)? Please explain
When OI is low, IV is high, there is a very uncertain event that may make the market move either side, very fast. Eg: Elections or Budget.
When OI is low, IV is low, market will be in a tight range with nothing major happening in the near future.
We should look at IVs of ATM options.
Hope these answers solve your querry.
Thank you for clarifying my query
Sir really enjoyed your OPTIONS BASICS class. It was a master class with tons of golden nuggets.
Please advise if I can buy any of these call options – for the year 2028