Hi trackers of #NIFTY50 there is a concept that I use on NIFTY index to trade options of the next expiry on the expiration of current contract. Example today is the expiry of Nov17 then I usually use this day to trade Nov24 option contacts.
I use this on my positional weekly spread on nifty50. And it mostly works with a High accuracy on nifty50 compared to other indexes.
What I observed is that the Wednesday or the day before expiry if you note the highest OI strikes just 15mins/5mins before closing. Nifty never close beyond that strike on the expiry day. And this is useful especially when entering a spread because you want some guarantee of trend which is favourable for the spread you are making, be it bullish, bearish or sideways. There is one time when this did not hold true in the last 2 years of tracking this live.
Therefore while it is a good way to analyse, one should always keep an SL of 2% or a % they are comfortable with.
Yesterday these highest OI strikes where 18400 and 18300. Hence my expectations is a close between this range. Even if there is an error of 50pts I am OK because we are in the next expiry and we get enough time to adjust. One who can combine price action on top of this will excel with high accuracy.
Post is getting larger than I thought. I'll share more in the future. If you reached till here. I salute you