Option levels indicator online - beta testing - page 4

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By the way, here is a good article on the theory of trading at option levels
 
Good afternoon friends.


Can you tell me if I understand the basics of using spot options correctly?


The basic concept in the reasoning I have read on the forum and on the links in this thread is as follows:


1. There is a certain "asymmetry of risk" between sellers and buyers of options.

Buyers - risk "only the premium" for the option, accordingly, to make a profit, they are interested in the price "going over" the strike + premium.

Sellers - the risk is theoretically unlimited, so, having received the premium, they are interested in the options not being exercised.


Hence


Option levels are resistance levels that option sellers try to keep unbroken

(the call option level is resistance, on an upward price movement

a put option level is resistance in a downward price movement )


And a parameter such as "option volume" describes the "strength" of this resistance level.


2. an indicator such as "open interest" is a kind of "momentum indicator" characterising the strength of the bears/bulls.

And, accordingly, we can use it to predict in which direction the price will move in a given range.


________________________________________________________________________________________________________


Is my reasoning correct?

Please correct me, if necessary.

I want to clarify at least this simple model of reasoning.


Thank you very much in advance.
 
Morzh09 >> :

I apologise for the inconvenience.

Could you, when you have the time and opportunity, guide me on how to work with Deductor?

And there is a branch on Deductor - Predicting time series with Deductor Academic 5.2 - you'd better ask there.
 
Morzh09 писал(а) >>

... Is my reasoning correct? ...

... everything is correct. Although Crunch has a very clever text on the main page http://realvolumes.ucoz.ru/forum/, but I would add there the text from the Walrus post- for the ultimate clarity of the question for newcomers .

Here's my question too, I asked it on the Crunch forum yesterday, but I haven't heard back yet - so I'm duplicating it here: "Question about the OI Indicator. On the home page it says "The indicator graphically displays market sentiment in the number of sellers/buyers within the option strike range". Why isn't OI expressed in number of standard contracts as it is done in Option Levels and Volume Indicator?"

 
xrust писал(а) >>

To read : ...

not lazy, got to it. Here is an excerpt from the source you cited http://successful-trade.com/viewtopic.php?t=463: "The market forms the crowd's opinion about the range of EURUSD movement before the options expiry, expressed in significant numbers of open interest at certain levels. Open interest is the number of open option positions for a particular strike ... From the information on the CME website, we cannot know with any certainty how many options were sold at what price. We only see open, high, low, close." So the full-fledged OI stack in the contracts - is it only for a narrow circle of big uncles? Or is it not so narrow, this circle? Do the retail clients, who trade at CME via an internet broker, have access to this information?

 
now from here http://polbu.ru/lebeau_analysis/ch26_i.html (this is C. Lebo, D. Lucas "Computer Analysis of Futures Markets"): "open interest is the total number of open contracts in the market by the end of the trading day ... Our conclusion, if you haven't guessed already, is that volume analysis works well in the stock market, but not in futures. Open interest, at best, can be applied as a confirmatory indicator."
 
There's also something else from there about volumes: "Volume analysis in the futures market has always had many difficulties in its application. One of them is that the volume value does not complete its formation until almost the end of the trading day following the day on which the actual transactions occurred. This means that for a trader trying to make a timely analysis, the information is at least a day late." This is not entirely clear, because Crunch has an Option Level and Volume Indicator updated every 5 minutes. It turns out that Lebo and Lucas relied on some kind of daily newsletter in their book, rather than on-line information - h/we don't know
 

ok, now https://www.mql5.com/ru/articles/1573 - article C-4 (Vasiliy Sokolov) about his Meta COT project. Yes, I just finished reading it a few days ago. It is worth a thesis, and Vasiliy put a lot of time into it. The Meta COT Toolbox is suitable for long-term and position traders of any commodity market - as the author writes. And for intraday foreign exchange speculators - to Khrust with his Option Levels Indicator with volumes and OM Indicator. The latter, however, is just a substitute (here you can beat me with canvas boots, but... "Plato is my friend, but truth is dearer" © Aristotle)

 
there is one link left: http://www.google.ru/search?hl=ru&q=open+interest&btnG=P... For the impossibility of embracing the immensity, I will only take the first resource that catches my eye - Rockefeller.ru dictionary: "Open Interest is the total number of open option or futures commodity contracts registered on a particular date by a clearing house. It represents the sum of sold or bought futures contracts (the number of bought contracts should be the same as the number of sold contracts). P.s.: And may my employer forgive me if he finds out what I am doing again during working hours. Amen
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