This section deals with positions traders are creating in Intraday.This can help with how to select stocks for intraday and to find which stocks to buy and sell.This can also help to select Short term trades.
With help of Open interest data , we can see positions that traders are making in futures and options stocks.The positions are usually classified as Long buildup , Short Buildup , Long Unwinding , Short covering
- LONG Built up => It means people are taking positions assuming price will go up. This is marked by increase in open interest and increase in price
- Short Built Up => It means people are taking short positions , assuming price will go down. This is usually characterized by Increase in open interest and fall in price.
- Long unwinding => This shows Long positions are now getting exhausted and people are starting to book profits , assuming rally is about to over
- Short covering => Short positions are getting decreased and people are booking profits and expecting reversal. Usually this is represented by Increase in price and fall in open interest
Combined with volumes , this can serve as important indicator in selecting stocks for intraday or short term