Insight required on In-The-Money Option Contract data on Kite in comparison to Full Mode Tick data :: 1] When the volume (See image attached) indicated on Kite at that instant is "zero". Is it that "Not a single trade happened" at that particular instant of time and even further till the volume was seen other than "zero"? AND The time between 1min chart may have had trades and ticks but were just not printed on chart. Is my interpretation right?
2] How to correlate above with Full Mode quotes (See image attached) received from Tick data. How to interpret the following; a) Volume b) Quantity and c) Open Interest
When you see volume in the chart, it refers to the number of units that were traded in that particular interval. In the above graph, it means for that 10 minutes there were no trades.
In full mode data, it is the cumulative volume that is sent from the exchange which means those many quantities traded for the day. In order to calculate the number of units traded in those 10 minutes, you need to subtract the volume of first tick data of the 10 minutes from the volume of last tick of the 10 minutes.
The total sell/buy quantities are the number of units that are pending to be executed. In other words, the sum of quantities of all pending orders at the exchange at that moment.
Open interest is the current value at the exchange.
Thanks for generous answers. Just need a little more about Open Interest. Does it indicate the number of contracts (Here Options contract) traded but not yet closed? Say One 12100PE Options contract was Bought but wasn't Sold yet nor was expired - Is my interpretation right??
@sagaranilganu , the Open Interest Concept is a bit different. It is not as simple as Volume.
Does it indicate the number of contracts (Here Options contract) traded but not yet closed?
It means the Total Number of Contracts that are OPEN in this counter at that particular time. Suppose the OI Value is 5000 lots at that time, then that means that there are 5000 lots which are being carried by the market participants at that moment. For each of these open contract there are two opposite parties involved.
The details of Open Interest Concept and how it is calculated, are nicely explained in this article - https://zerodha.com/varsity/chapter/open-interest/ Please go through it once and if you still have any doubt about any particular point, then mention it and I will explain that point in the details.
In the above example, you have mentioned that one contract of 12100 PE was bought , now in this case, it will depend on the Counter Party, if the counter party is also creating a Fresh Short Position, by selling the 12100 PE, then a new contract will get added to the Total Open Interest. But if the counter party of this trade, is actually Liquidating their Earlier Position, then no new contract will get added to the Open Interest Value.
If you are new to the concept of OI, then you might find it a bit confusing at first, but once you go through the article link, then you will be able to understand what I mean.
@sujith & @autotrading Ya. Your response certainly explains me more. Did go through the link which cleared my doubts. Utmost thanks for your guidance !!!
Although this article (indeed greatly self explanatory) ; raises one issue w.r.t Open Interest 1] Referring above ITM contract; assume that I BUY 1 contract for Rs360 @ 9:20 am approx. 2] Here my 1 contract was either a seller's short position or someone liquidated his earlier bought position. 3] In either case the Open Interest will be at least 1OI - Right?? 4] Now I wish to SELL (Square-off my 1 contract) at around 10:05 am @ market price say Rs370 approx (It will always be a little lower). 5] Here's my issue:: Even though there is at least 1OI; there are no Short sellers' nor are there any buyers' to buy my contract!!! a) Now NO buyers' is OK because simply they do not want to buy BUT b) Short sellers' are mandated to buy-back (As I understand the theory) How to interpret this thing n where am I getting wrong???
3] In either case the Open Interest will be at least 1OI - Right??
Only if it was a fresh trade, you will see OI increase by 1. If it was covering a short position, the OI will remain the same.
b) Short sellers' are mandated to buy-back (As I understand the theory)
In India, we trade European options, the short seller is only obligated to cover his position on expiry(The exchange exercises the contract and settles the buyer). In American options, the option buyer gets the option to exercise his position anytime before the expiry.
So my understanding has somewhat become like this; 1] If I BUY 1 contract, irrespective from whomsoever I get (Short seller created a new position or there was a seller who squared off his earlier bought position) 2] a) After that there are no buyer's interested to buy b) No Short seller's ready to willfully buy my contract as they are confident of their strategy. 3] I would be able to SELL it only at the time of expiry day end where eventually the Exchange will do that job.
If you bought 1 Contract, then you will be able to sell it back at price xx if there is any buyer willing to pay that xx price to you. If there is no buyer willing to buy at that price and you yourself are not willing to sell it at a lower price, where there might be buyer present, then you will end up holding your long position till the expiry date end time, when the exchange will square it off.
Secondly, if you are not bothered about the selling price xx, then you can always sell back your long position at the Market Price, till there is someone present in the OrderBook to buy it. If there are zero buyers present in the order book, then the above case will again apply and your position gets squared off at expiry.
1] Just reconfirmation with other scenario. a) Now No Buyers are in order book to buy that contract. b] But 1 Short seller is ready to buy (covering) his position at the market price & I am also ready to sell at market price c] Will this trade happen and will contract gets SOLD?
2] W.r.t above all discussions and above graph of "0 volume" can it be said that; a) There "may" have been Open Interest BUT EITHER b) There were No Buyers in order book to buy at that price (Rs370) OR c) No Short sellers ready to cover at that price (Rs 370) OR d) Perhaps BOTH were not ready OR EVEN E) SELLERS (Like me) were simply not ready to sell at that price ULTIMATELY NONE WAS READY TO TRADE!!! HENCE ZERO VOLUME AT THAT TIME!!!
1] Just reconfirmation reqd. with other scenario. a) Now No Buyers are in order book to buy that contract. b] But 1 Short seller is ready to buy (covering) his position at the market price & I am also ready to sell at market price c] Will this trade happen and will contract gets SOLD?
2] W.r.t above all discussions and above graph of "0 volume" can it be said that; a) There "may" have been Open Interest BUT EITHER b) There were No Buyers in order book to buy at that price (Rs370) OR c) No Short sellers ready to cover at that price (Rs 370) OR d) Perhaps BOTH were not ready OR EVEN E) SELLERS (Like me) were simply not ready to sell at that price ULTIMATELY NONE WAS READY TO TRADE!!! HENCE ZERO VOLUME AT THAT TIME!!!
In the above graph, it means for that 10 minutes there were no trades.
In full mode data, it is the cumulative volume that is sent from the exchange which means those many quantities traded for the day. In order to calculate the number of units traded in those 10 minutes, you need to subtract the volume of first tick data of the 10 minutes from the volume of last tick of the 10 minutes.
The total sell/buy quantities are the number of units that are pending to be executed. In other words, the sum of quantities of all pending orders at the exchange at that moment.
Open interest is the current value at the exchange.
Just need a little more about Open Interest. Does it indicate the number of contracts (Here Options contract) traded but not yet closed?
Say One 12100PE Options contract was Bought but wasn't Sold yet nor was expired - Is my interpretation right??
The details of Open Interest Concept and how it is calculated, are nicely explained in this article -
https://zerodha.com/varsity/chapter/open-interest/
Please go through it once and if you still have any doubt about any particular point, then mention it and I will explain that point in the details.
In the above example, you have mentioned that one contract of 12100 PE was bought , now in this case, it will depend on the Counter Party, if the counter party is also creating a Fresh Short Position, by selling the 12100 PE, then a new contract will get added to the Total Open Interest.
But if the counter party of this trade, is actually Liquidating their Earlier Position, then no new contract will get added to the Open Interest Value.
If you are new to the concept of OI, then you might find it a bit confusing at first, but once you go through the article link, then you will be able to understand what I mean.
Thanks and regards
Ya. Your response certainly explains me more.
Did go through the link which cleared my doubts.
Utmost thanks for your guidance !!!
1] Referring above ITM contract; assume that I BUY 1 contract for Rs360 @ 9:20 am approx.
2] Here my 1 contract was either a seller's short position or someone liquidated his earlier bought position.
3] In either case the Open Interest will be at least 1OI - Right??
4] Now I wish to SELL (Square-off my 1 contract) at around 10:05 am @ market price say Rs370 approx (It will always be a little lower).
5] Here's my issue:: Even though there is at least 1OI; there are no Short sellers' nor are there any buyers' to buy my contract!!!
a) Now NO buyers' is OK because simply they do not want to buy
BUT
b) Short sellers' are mandated to buy-back (As I understand the theory)
How to interpret this thing n where am I getting wrong???
1] If I BUY 1 contract, irrespective from whomsoever I get (Short seller created a new position or there was a seller who squared off his earlier bought position)
2] a) After that there are no buyer's interested to buy
b) No Short seller's ready to willfully buy my contract as they are confident of their strategy.
3] I would be able to SELL it only at the time of expiry day end where eventually the Exchange will do that job.
Secondly, if you are not bothered about the selling price xx, then you can always sell back your long position at the Market Price, till there is someone present in the OrderBook to buy it. If there are zero buyers present in the order book, then the above case will again apply and your position gets squared off at expiry.
If still any more doubts, feel free to ask.
Regards
a) Now No Buyers are in order book to buy that contract.
b] But 1 Short seller is ready to buy (covering) his position at the market price & I am also ready to sell at market price
c] Will this trade happen and will contract gets SOLD?
2] W.r.t above all discussions and above graph of "0 volume" can it be said that;
a) There "may" have been Open Interest BUT
EITHER
b) There were No Buyers in order book to buy at that price (Rs370)
OR
c) No Short sellers ready to cover at that price (Rs 370)
OR
d) Perhaps BOTH were not ready
OR EVEN
E) SELLERS (Like me) were simply not ready to sell at that price
ULTIMATELY NONE WAS READY TO TRADE!!!
HENCE ZERO VOLUME AT THAT TIME!!!
a) Now No Buyers are in order book to buy that contract.
b] But 1 Short seller is ready to buy (covering) his position at the market price & I am also ready to sell at market price
c] Will this trade happen and will contract gets SOLD?
2] W.r.t above all discussions and above graph of "0 volume" can it be said that;
a) There "may" have been Open Interest BUT
EITHER
b) There were No Buyers in order book to buy at that price (Rs370)
OR
c) No Short sellers ready to cover at that price (Rs 370)
OR
d) Perhaps BOTH were not ready
OR EVEN
E) SELLERS (Like me) were simply not ready to sell at that price
ULTIMATELY NONE WAS READY TO TRADE!!!
HENCE ZERO VOLUME AT THAT TIME!!!