Unusual Option Activity for Intraday Options Trading

Hello everyone, welcome back to our channel. This is Diljeet Uppal, your trainer, and I want to welcome you all today in Quantsapp. Today we're going to learn how you can do an intraday strategy, or how you can use a data point from Quantsapp and analyze an intraday move, right? So before starting, if you're new here, you can sign up to Quantsapp and you can unlock 20-plus free tools. When you unlock Quantsapp, you will see that, you know, in your trading journey you are missing out a derivative data point, and you can analyze and further use Quantsapp to your benefit. Now, if you want to understand what Quantsapp is providing or what kind of tools we are having, you can go here in the Learn section and you can go in the Video Library. You can check out the multiple videos and strategies of how you can use Quantsapp to your benefit. Now, if you have any further doubts or queries, you can come here at this Help Center, Support, and you can write us, you can WhatsApp us, and we'll try to help you out, right? So, uh, without delay we'll just move on to the topic, and let us just understand how you can use this particular tool and analyze or, you know, identify a direction before it's going to happen. So we are going to talk about the Unusual Option Activity, okay? So as

of yet you are seeing the technical charts of the futures data, you are seeing the buyer initiated quantity, and you are seeing the multiple indicators. All of the data which you have analyzed as of yet, it's all of the futures data or the futures data point. Now this tool is going to help you identify the options perspective, or it's just going to give you the view on the basis of the options, like what is happening in the options, okay? So as you can identify with the name, it is the Unusual Option Activity, so any kind of unusual activity happening in the options you can identify with this tool, okay? So, uh, you can come here on the home page also, you can directly jump onto this from here, or else you can go on Track, and in Track you can simply go to Options OI and you can use the Unusual Option Activity. So as you can see, this is a kind of a display, what you're seeing, okay? So here what we can see is there are multiple, uh, multiple signals which you can see, just a second, okay, so there are multiple signals which you can see, okay? So one will be IV, one will be volume, OI and price. So anything, if there is an increase in any of these four, or if there is a decrease in any of these four, you will be identified here, okay? So we can use, we can select the option type

for both call option, put option or futures. So if you are having a specific direction, you can directly select the option type from here, okay? And the next one is the build-up type, okay? So if you are having any specific direction, so you can put that, so long build-up or short build-up, or else long unwinding, or else short covering. So any kind of build-up you can select personally, okay? So we'll move on further to how you can set it up. Before that we need to understand the concept. So, uh, when we talk about IV, okay, so in the options IV is acting like a demand, okay? So whenever the IV is increasing, okay, so let us suppose IV is increasing of some option, so that is indicating you that particularly the option is coming in demand, okay? So with this we are seeing the option is also coming in demand. So if the option is coming in demand, that means, like a universal concept says, that anything or any instrument, if the demand for the asset is increased, you will see the price will also increase with that. So the same thing is happening here: IV is increasing, the option's demand is increasing, and with that we are going to see an increase in the premium, okay? So this is the direct denotation what you can take from here, okay? So if

you are, if you're an option buyer, you want the IV to increase, so IV to increase for the option buyer, okay? Similarly, when you're a seller, your view is opposite to that, so your IV should be lower for the option seller, because sellers, uh, when, when you're seeing selling in any kind of option, that means the demand is decreasing or there is a lot of supply there. That is why particularly we are seeing that the sellers are mostly interested in the ones where the demand is falling, so that they can sell properly, okay? So wherever you are seeing IV is decreasing, an option seller can make an entry at that particular point. Now we have discussed the IV perspective, now let us talk about the volume, okay? So let's just suppose the volume is increasing in an option premium. So let's just suppose, uh, we'll talk about Nifty only. So Nifty, let's just say 25, 25,000, 25,050, 25,000, uh, sorry, 25,100, just a second, yeah, just let it be 25,100, 25,150. So what we

are seeing here, uh, these are the multiple strikes. Let's just suppose the volume is tending to increase in this, okay? This is the at-the-money level, let's just believe this is the at-the-money level, okay, and below that we are seeing all the OTMs. So what we are seeing here is that the volume is incre-, let's just suppose the volume is increasing, so that is indicating you that somewhere people are trading more in the particular option. And with that you can get an indication that somewhere, if you want good liquidity or if you want good price action in any kind of an option, where the volume is increasing, that kind of an option will give you a good, uh, you know, good perspective, okay, or it will give you a good entry point in this option, because the volume is increasing, that means people are tending to trade more in this particular option. Similarly, if the volume is falling, again it is a benefit for the seller. As we have spoken earlier, uh, the seller will be more benefited here. Next we'll talk about the OI. So OI and volume somewhere correlate, okay? So there is a minor difference between the OI and the volume, which is that, let's just suppose, if the OI here, let's just suppose the quantity being traded is 5,000, okay? So some buyer and seller, they agree to a trade, so now we are seeing an

open trade here, so there's an open, open trade of 5,000 quantity, okay? Now when the buyer or the seller squares off his position, what we'll see is the OI is turning to zero at the square-off. So when, when you square off, the OI becomes zero. But the same, if we talk about volume, in volume you'll see here 5,000 quantity being traded, and now, uh, at the square-off point you'll see 10,000 quantity being traded. So buying and selling both are included in the volume, but in the OI you are seeing, when the buy, when there is a trade initiated, it will show you the quantity, and when the contract is squared off it will go back to zero. So that is the difference between OI and volume, okay? But if we see here, you can see that basically there is a flow here, okay? So as we were talking about IV, initially IV is acting as a demand, right? So whenever the demand increases, that is the time you will see volume in the particular stock, uh, particular stock option or the index option. After that you are seeing the OI is increasing. So after being traded multiple times, after we are seeing multiple volumes, uh, we are seeing multiple volume analysis that, you know, volume is increasing, with that you'll

see a change in the OI, or you can see an increase in the OI because it is more traded, and with that you'll see a change in the price. Now it can be either side, it can be bullish or bearish, but you can denote the direction with this, right? So this was the signal type, what you can analyze here, okay? Mainly, if you simply keep IV, it is more than enough, because we are here to see where the particular option's demand is lying. And whenever, you know, as you can see here, so these are the points: what you can do is, whenever the IV is increasing in any option, you can go for option buying, and whenever the IV is decreasing in any option, you can go for option selling, right? So I'll just clear this for now, and as you can see, uh, I'll just, we'll go on the page, okay? So I'll just change it to IV, okay? So in IV we are not having multiple signals here, okay? So we are seeing the change in the IV now. So I've added two symbols here, okay? So if you want, you know, if you, if you want to change the symbols, you can go here and add multiple symbols here. You can select all the stock options and the, uh, index, and you can select multiple expiries, and you can set it up here. So whenever you set it up during the live market, you will see signals popping up. So as soon as the

signal is generated, it is being shown to you. That is also second sensitive. If you can see the timestamp, you can see it is very second sensitive. Just 4 seconds, okay, 4 seconds before the market closing the signal was generated. So as you can see, it is very second sensitive, okay? And then we are seeing here, you can see the change in signal type, we are seeing change in the IV, okay? With that we are seeing the name of the symbol, because if you are using multiple, you can use multiple stock options, multiple indexes, and you can monitor them all together, okay? And you can see the expiry, okay? So we are on the monthly expiry, so we are seeing both, uh, Nifty and stocks in the same expiry. You can see the strike is given to you, you can see the option type is given to you. Now, if the option strike is given to you, option expiry is given to you and option type is given to you, so it is making your work a little easier, okay? So let's just suppose the price is increasing, okay, and we are seeing that in the CE, IV is increasing. Would that be a good insight for you, or would that be a good signal for you to go and trade? Yes, for sure, this is a very good signal for you. We are seeing the CE's IV is increasing, the CE's, CE is

coming in demand, the call option is coming in demand and the price is going up. So this is my point of entry, I'll make an entry on the basis of these two, okay? So this is just one insight which you have taken as of yet, okay? So IV is just one insight which you have taken. Now the second insight what you need is the build-, build-up, okay? So what you can see here, build-up, okay? Before build-up, you can see, like, you'll get the IV values also. So the previous value is given to you, okay, the current value is given, so we are seeing the change also. So almost from 14.96 it has gone to 12.2, uh, 12.12, sorry. So from 14 to 12.12 is almost around 18% change, but we are seeing a negative 18% change, so that means IV has fallen. So what has happened? The CE's IV is falling, that means the CE is not in demand. Whenever, I said, whenever you're seeing the CE is not in demand, that means the premium might be falling. So the option buyer, whoever is an option buyer here, okay, the option buyer won't enter, okay, the option buyer won't enter. Seller, okay, for the seller this is your market, this is where you can initiate

your trades in the given instrument, okay? So this is the type of a setup which you can see, okay? So you can see all the details of the options given to you, the change in the IV signifying the demand, as I said, you can see the demand here, and with that you can see the actual changes in the values, and that is also in percentage value. You're seeing, whenever it is positive, you as an option buyer, option buyer, that is your market; whenever it is decreasing, that means seller, option seller, it is your market. Now the next point is the build-up, as I was saying. So the build-up is also very important, okay? So build-up gives you an idea what is happening in the specific option: is the option, uh, being bought, is the option being sold, is the option, uh, seller squaring off, or is the option buyer squaring off? So that is also giving you another insight, okay? So, so the build-up, mainly if you are an option buyer, okay, so if you're an option buyer, you can go here in the build-up type, you can simply select long and short covering. Why? Because, uh, I'll explain to you, because see, long build-up, generally, as everyone knows, in the long build-up what we are seeing is the contracts increasing, so OI, OI is increasing, and

with that the price is increasing. So new contracts are being made and the price is increasing, that means buyers are entering, fresh buyers, okay? So that means new positions are being made, so today's new buyers are entering. But when we talk about short covering, so the one was the long build-up which you have understood, that long build-up, why do we need it; now why short covering, okay? Because in short covering what we are seeing is the OI is falling down, okay? So the OI is decreasing, that means the contracts are not being made, new contracts are not being made, but the earlier contracts are also being squared off, and with that you are seeing the price is increasing, okay? So the price is increasing. That is telling you that the OI is falling and the price is increasing, that is suggesting you the SC build-up, that is short covering, okay? So as the name suggests, the shorts are covering their position, so the seller is exiting here. Now the seller is exiting here, so your option sellers are squaring off their position, so it is a good point of entry for the option buyer. So as an option buyer you

can select long build-up and short covering. That is giving you an insight that the price can go up on the basis of the build-up. So we are doing two analyses in the options: one is the OI, uh, so build-up analysis, and with that we are using, uh, the IV data and we are trying to denote the demand. So you are using this tool to gain insights for the market's view or the direction, but from the options perspective. So as long as, until what we are seeing here in the charts and in the buyer initiated, seller initiated, all those were the futures perspective. But again, the futures market is traded differently, uh, and the options are traded differently, okay? So let's just suppose, we'll just take a pure example here, okay? So let's just suppose in Nifty's price we have seen a good momentum here, and then it has stagnated. Now, in the future, if you would have bought a future here, okay, so let's just suppose Nifty has gained around 1%, okay, so 1% gain we are seeing in Nifty, so we have seen the price has gone up 1%, so your profit will be 1% in the

future. But when we talk about options, if you go and if you bought it here, okay, so let's just suppose you bought an option, a call option, at-the-money call option, okay? So at the money you're having a delta of 0.5, so if you're having a 1% gain, that is your 5% gain in the option. So let's suppose it's a 5% gain you are seeing on the option side. But, but again, if you haven't squared it off here, if you didn't square it off here and you hold it till the end of the day, this 5% might also decrease, because the market is sideways, and whenever the market is sideways people are not interested in trading, uh, Nifty or BankNifty because they are sideways. So that means people tend to go more for the stocks, and what will happen if the market goes sideways, we'll see a decrease in the IV again. With the decrease in the IV you can see the premium might fall down and it might not match your target. So that is why it is very important to analyze the options perspective and the futures perspective, and then make a thorough view, and then you take a direction or you take a trade, right? So I hope you got this concept. Thank you so much, guys, for watching. Now, if you have any doubts or queries, you

can drop them in the comments and I'll try to help you out. So I hope you like the concept, guys. Thank you so much for watching. Do like, share and subscribe for more such videos, and if you have any doubts or queries, you can drop them in the comments and we'll try to help you out. See you in the next video.