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Subhadip Nandy
@SubhadipNandy16 4 years ago 553 views

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The BNF OI puzzle, what I think happened. This is post mortem analysis 😀

COi was going up like crazy since early March, positions were being created in far month ( go thru my previous tweets)

OI = net shorts = net longs. So informed traders were taking a huge position expecting a parabolic move ( we did not know whether up or down). As of now, my guess is that the whole position was a long position. Someone had the info of the rate cut

You can see that the positions were cut hugely on 1st April. What happened on 1st April ?

This happened 👇👇

If the rollback did not happen ( due to whatever reason), BNF would have gapped up by 1000-1500 points and the shorts would have been killed, and longs would have been laughing all the way to the bank. See the cut on 1st April

But since the rollback did happen, what we now had were trapped longs. that's why we are seeing any upmove getting sold as longs get rid of their positions. COI now is down to normal levels as you can see

My guess is there are still some longs trapped, so as long we do not close above 33600 chances are we will see one more spike and climax selling on the downside. There is a strong supply in the 33400-33600 zone. the 33600 figure is quantitative

@MyFnO @gautam_icma

End of day view :
This is what I am expecting. Will chance my bearish stance if we close > 33600

*change

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Subhadip Nandy
@SubhadipNandy16

A small thread on intraday support resistance logics over time

The most common is Pivot , support and resistances calculated from the previous day's data

https://t.co/ILMjMay1zc

They can be calculated for daily, weekly, monthly etc.

Camarilla levels are also quite popular. This seemed to be the next best thing after the original pivots at one point of

Over the years, many other technicians have tried to devise other methods to devise intraday support resistance points. In almost all cases, the previous days OHLC were used in some variation, in some cases today's OPEN was also used as an input

I have gone through almost all of the formulas. Some work on some days, some days it doesn't.
What struck me was that in each of the cases , we were using the OHLC and doing some maths with a multiplier/divider which WE/the trader thought fits the price action of the markets

This is the same as choosing a time period of an indicator and hope the market follows my choice of time frame to give me good trades. Like say a crossover of a 5/13 moving average, or a 14 period RSI or whatever.

Subhadip Nandy
@SubhadipNandy16

Ok here is the explanation. Grab a cup of coffee and read on. If you have not read/noticed this, you will see intraday options movement in a new light.

In a high IV environment or when the market is very volatile
" OTM options will behave like ATM options", one will get almost the same delta movement
— Subhadip Nandy (@SubhadipNandy16) January 21, 2022

Say we have two options, one 50 delta ATM options and another 30 delta OTM option. Normally for a 100 point move, the ATM option will move 50 points and the OTM option will move 30 points. But in a high volatile environment, the OTM option will also move nearly 50 points

To understand why this happens, first understand why an ATM option is 50 delta. An ATM option has the probability of 50% of expiring as ITM. The price just has to close a rupee above the strike for the CE to be ITM and vice versa for PEs

Now think of a highly volatile day like today. If someone is asked where the BNF will close for the day or expiry, no one can answer. BNF can close freakin anywhere, That makes every option of an equal probability of being ITM. So all options have a 50% probability of being ITM

Hence, when a huge volatile move starts, all OTM options behave like ATM options. This phenomenon was first observed in the Black Monday crash of 1987 at Wall Street, which also gave rise to the volatility skew/smirk

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Subhadip Nandy
@SubhadipNandy16

My experiences in trading through various international locha events, high VIX and various events.
A thread

I follow the news, but never think of myself smart enough to predict what is finally going to happen. I am not a geopolitical expert, smarter brains than me are analyzing and acting on the news

Their actions are reflected on price, volume, OI. Following the data keeps me at par with the latest news

Be ready to cut your existing positions ruthlessly when data changes, be ready to absorb the loss and get out of the position. Never hold onto with hope.
Never works

Reduce trading volumes. Higher the volatility, lower the trade size.
Use lower volumes and bigger stops to counter the volatility

Subhadip Nandy
@SubhadipNandy16

The most common problem faced by day-traders and it's easy solution which is extremely difficult to implement.
A thread.
( uses concepts I have discussed many times before in separate threads)

Problem : I have a good system, I understand charts and/or price action, but I simply can't make money. I hold my losses too long or ( this is most common) I get out of profitable positions too fast and cannot sit for the whole move

At many firms at NASDAQ, day-traders are seen as elite sportspersons playing in a difficult taxing game. That's why, they have regular sessions with sports psychologists. They are advised to follow the basic routine of sportspersons.
Train ---- Play tournaments --- Rest

The cycle repeats

We retail day-traders here neither rest nor train.

Rest = taking time off markets
Train = trading in markets in training mode

Understanding REST is easy, simply take time off markets and spend time with family or do something you love

Subhadip Nandy
@SubhadipNandy16

Sharing one of my contra views. Adani Ent fut has had massive rise in cumulative OI and there has been a price brkout outside the range today. This means bears are trapped. Longs, whoever they are , are so strong that Adani has not sold off in this market mayhem (1/n)

If Nifty today sells off at SGX , bears will get more confidence to short tomorrow morning or will wait, they will not sqoff. I am expecting Adani to propel upto 160 very fast (2/n)

I will be using my day-trading system and my option strategies ( already in butterfly at 160) to trade this view. This stock is massively volatile with large bid-ask spreads and moves in jerks. Trading Adani requires skill, not for the faint hearted or slow traders (3/n)

I will be trading a major part thru options, continuously adjusting my positions as new data comes in, will be using my systems. Will use V_scalper to scalp futures. How you trade this is your issue, I WILL NOT provide any followup(4/n)

Forced to issue the last disclaimer because I seriously get affected by DMs from traders who cannot handle options positions or futures. Asking me about this in market hours will lead to immediate block . Best of luck (n/n)

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