How to Find Nifty Trend Based on Option Data

July 30, 2010 by Sourabh Gandhi ,    Contact Sourabh Gandhi
Filed under: Stock Trading  169 views


How to Find Nifty Trend Based on Option Data

1. To use this calculator you need the CMP / Spot price of Nifty.
For intraday enter LTP. For EOD enter Closing Price.
2. You require Options Data for the particular Nifty for the current month.
3. Now let us see how to use this calculator. Lets say i want to find the trend for Nifty for tommorow.
4. I will first see the close price of Nifty index. (Close price is 4882)
5. After entering the Spot Price, you will see two textfields (one for CALL and other for PUT price.)
6. Enter the prices for the CE and PE shown.
7. Now you can press the button Find Trend
8. Based on the calculation, you will get the immediate trend for Nifty.

Example – EOD
Lets say Nifty closing price for today is 4882.
I see the two new textfields. one for CE and another for PE. (5000 CE and 4800 PE)
I enter the price for this two options (closing price)
I press the button Find Trend. I get the message TREND is UP.
Example – Intraday
Lets say i want to check the trend in between the market hours. I will enter the spot Price of Nifty.
I enter the spot price of nifty at 5005. I see the two new textfields for options. (5100 CE and 4900 PE)
I enter the price for them. Lets say 5100 CE is trading at 56, and 4900 PE is trading at 58.
I enter this prices in the above calculator and press the button Find Trend.
I get the message TREND IS DOWN.

http://www.pivottrading.net/p ivot/pivot/trendFinder.html

Note: The above calculations are just an indication based on option pricing. You may include other indicators as well to confirm the trend.



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