At what point do you take the measurement of OI? Today (the day before expiry) OI is between 400 and 420 while the stock is at 380. Or, am I looking at OI wrong? I looked for the highest two volumes….
At all times I look at the highest OI from the put side then the call side. So $380 puts and $400 calls.
Do you use this predictively to decide what options to trade at any given time? To determine what price to buy/sell the stock? I am trying to figure out to add this technique to my trading…
The highest OI for calls is $400 not $420. $420 is high but not highest. Yes it helps predict what range AAPL will trade in. Not 100% of the time but it gives you a good baseline. Just watch it for a few month until you get a hang of it. Then if you get comfortable. Start to use the highest OI strikes as your buy and sell points. Buy when stock at/near put OI, sell a little when gets to mid-point (where graph intersects) then sell 100% at high call OI. Over time you can deploy a myriad strategies.
Thanks for all of that and I have copied for future use. Can I ask one more question? Do you/can you use this info for figuring out at which strike price to sell weekly calls?
…continuing… What I see right now as the highest call OI is $420 (about 30,000 open interest. Am I missing something?
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