Smart Option Buying Insights || @NitinMurarkaNifty​

Assets, instruments & sectors mentioned

• Indices: Nifty (NIFTY), Bank Nifty (BANKNIFTY), Fin Nifty (FINNIFTY)
• Index leaders referenced: HDFC Bank, Axis Bank, Reliance (by weightage)
• Instruments: index options, stock options, futures
• Tools/websites: Auto Trender (AutoTender) from SMC, NSE option chain / open interest data, Sensibull, TradingView

Key takeaways — framework & methodology (step-by-step rules)

1. Observation window (don’t trade emotionally early)

   • Observe market and OI/PCR data from market open; avoid impulsive trading between 09:15–10:30 (designated “emotional” hour).
   • Wait until ~11:00–11:30 for more meaningful OI/PCR signals (data matures after the initial hour).

2. Trend identification (Rule 1 & 2)

   • Combine price behavior vs open (price trend) with OI imbalance (change in call vs put OI / PCR) to decide direction.
   • Compute change-in-open-interest on three strikes around ATM (ATM, ATM+1, ATM−1). Compare combined call vs put change to get an “imbalance” measure.
   • Example thresholds referenced: PCR ≈ 1.27 (27% imbalance) used to identify trend; presenter suggested imbalance > ~30 (units/points) indicates a trending direction.

3. Entry timing (Rule 3)

   • Use VWAP on futures (not spot/options) as preferred entry reference.
   • Enter on a VWAP rejection plus a confirming reversal candle (9‑minute bars preferred; 15‑minute as alternative). Multiples of 3 minutes match the exchange OI refresh cadence.
   • Buy ATM options for intraday momentum entries (higher gamma / quicker response).

4. Trade sizing, targets & stop‑loss (SL)

   • Typical target for ATM buys: ~30–40 points; stop‑loss: ~25–30 points.
   • Risk‑reward target cited ≈ 1.5 (example: SL 25, target 35–40).
   • Max trades per day: 1–2 (focus on quality entries).

5. Risk management & overnight rules

   • Never trade options without a stop loss.
   • Do not take naked option positions overnight. If carrying overnight, hedge (bull call spread, bear spread, covered call) to limit downside and premium erosion.
   • Avoid averaging into losing option positions — better to reduce/exit than average down.

6. Data rules / practical measures

   • Focus on change in OI (intraday OI change) rather than only absolute OI; look at combined change across nearby strikes.
   • Use futures VWAP because option prices include time value; VWAP on futures gives cleaner entry signals.
   • Preferred chart timeframe: 9‑minute bars (multiples of 3 mins because exchange OI updates every 3 mins). Tick‑by‑tick can be used if available.

Auto Trender (AutoTender) — role & features

• Product by SMC (presented by Nitin Murarka) that displays OI shifts (change in OI) and imbalance live — exchange data refresh ~every 3 minutes.
• Visualizes where option writing / OI accumulation is occurring; helps buyers and sellers read direction and timing.
• Provides chart overlays, PCR/imbalance metrics and alerts; allows combining technicals (VWAP, price action) with OI‑led signals.
• Presenter noted the tool is not the only source; NSE option chain, Sensibull and other free tools can also provide OI data.

Concrete examples & numbers highlighted

• Example index levels used in demos: Nifty around 24,150 / 24,250.
• Example trade: buy Nifty call ~₹125 and later book profit around ₹153 (illustrative).
• Intraday target/SL suggestion: target 30–40 pts; worst-case stop 25–30 pts for ATM option trades.
• Typical R:R example: ≈1.5 (gain ≈ 1.5 × risk).
• Trades per day: typically ≤ 2.
• OI guidance: wait until meaningful OI accumulates (examples referenced large round numbers like 30–40 lakh open interest for decisiveness).
• Bank Nifty: more volatile (example level ~50,000) and led by a few banks — higher risk of stop‑loss hunting. Nifty described as less volatile and preferred.
• Polls: daily samples of ~4,000–6,000 traders referenced for gauging outcomes.

Recommendations & cautions

• Do not trade options without a stop loss.
• Avoid trading during the early “emotional” hour (09:15–~10:30/11:00).
• Use futures VWAP for entry signals (option prices carry time value).
• Do not carry naked options overnight — use hedges (bull call spread, bear spread, covered calls, etc.).
• Avoid averaging into losing option positions.
• Limit intraday trades to high‑probability setups (1–2 per day).
• Ensure sufficient OI volume / change‑in‑OI before trusting imbalance signals.
• Require technical confirmation (VWAP rejection + reversal candle) in addition to OI/PCR signals.

Performance metrics / expected outcomes

• Aim: higher accuracy by combining leading OI data (PCR/imbalance) with price action and VWAP.
• Typical single‑day moves shown: 30–50 points on Nifty option trades if properly timed.
• Profit booking strategy: staged exits (book partial, then trail).
• Presenter emphasized increased accuracy when adding open‑interest based leading indicators to technical analysis — method improves probability but does not guarantee results.

Practical charting & timing suggestions

• Timeframe: 9‑minute bars recommended (use 15‑minute if 9‑minute not available).
• Use combined change‑in‑OI across three ATM strikes to calculate imbalance.
• Entry confirmation: reversal candle around VWAP on futures; avoid entries during the first hour.

Tools & data sources mentioned

• Auto Trender (AutoTender) from SMC — live OI shifts every ~3 minutes
• NSE option chain / NSE website
• Sensibull (referenced as free tool)
• TradingView (may not provide exchange OI)
• Futures chain — watch VWAP on futures rather than spot/options chart

Disclosures, caveats & final note

The presenter stressed this was not promotional advertising for Auto Trender (though the product was demoed). Standard securities‑market disclosure: investing is subject to market risks; read relevant documents carefully. The method improves probability but is not a guarantee — practice (for example, use the method for ~10 trading days) to get comfortable.

Presenters & sources

• Guest: Nitin Murarka (SMC, creator/host of Auto Trender)
• Hosts / show: Deep Talks team — Deepak and Pooja
• Data/tools referenced: NSE option chain, Sensibull, TradingView, Auto Trender (SMC)