Options Key Terms Explained to Help You Make Money

We are letting you know a few terminologies whose data if used intelligently can help you spot good trading opportunities and daily option tips traders are benefitting with it. The key terminologies are stated below:

 Open interest–Total number of open or outstanding options and futures contracts in the derivatives market.

 PCR –It is derived by dividing the total number of open put contracts by the total number of open call contracts. If the ratio is more than 1, it means that more puts have been traded during the day and if it is less than 1 it means Calls have been more active than put.

 Long build up- An increase in open interest along with an increase in the price indicates bullishness or long build-ups in the stock.

 Short build up-. An increase in open interest along with a decrease in the price indicates bearishness or short build-ups in the stock.

 Long unwinding-. A decrease in open interest along with a decrease in the price indicates a long position getting squared off or profit booking.

 Short covering- A decrease in open interest along with an increase in the price indicates a short position getting squared off or profit booking.

You must go through this video explaining options for beginners and you will be immensely benefitted.