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Call writers are traders who have sold call options of varied strikes, expecting that the underlying will not go above those stipulated strike prices. When the underlying price rises and crosses the strike price of a very high open interest call option, these option writers are possibly said to be trapped and most of them would start unwinding their short positions and possibly shift their open positions to other strike prices, i.e. rolling their positions to higher strikes or OTM strikes. So, in that specific call option, which results in unwinding, causes the call option premium to rise up rapidly and is considered a bullish signal for the underlying.

Trap Indicator is a proprietary algorithm of Quantsapp which searches for Nifty , Banknifty where the call writers or put writers are getting trapped, also prices of NSE F&O stocks turning bullish or bearish respectively, hence hurting the option sellers.

SPEAKERVigneshwar IyerTrainer, Quantsapp

5+ years of market experience, mentored several people in options trading. Sound understanding of the concept of demand and supply zones using option strategies.

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