60% Catageory Direction Weigtage

Sentiment Score
20 1 Technical A 1 30
2 Open Inter 1 20
Neutral
70% 1% 129.00% 3 FII Data 1 20
M
rate od
era
4 Futures Da 1 10
e
od te 5 Global sen -1 20
M

Choose you view

e

Extr
m

Bullish 1
Extre

e
Bearish -1

me
Neutral 0
J
How to Analyze the Market Sentiment?
Step 1: Technical Analysis

Just observe the following chart

Bullish if, INDEX is above 200 & 50 DMA

Bearish if, INDEX is below 200 & 50 DMA
Neutral if, INDEX is between 200 & 50 DM
In this example its "Neutral Setup"

When to use this tool?

This tool is bascially designed to make a view in the market by

looking into multiple data points so that you will be having
high probability of success for the trades you take.

Here are the conditions to follow based on your trading style: Step 2: Open Interest Analysis : https://www.bl
Intraday Trading:
Follow this tool after market hours to take decisions for next Bullish Setup:
day. Following are the conditions of Bullish Se
Weekly Trading: 1. In Open Interest Distribution there is m
Follow this tool on weekends to take decisions for next week. than CALL contracts
Monthly Trading: 2. In Open Inerest Change there are more
Follow this tool on weekends to modify decisions for CALL contracts
upcoming week.
3 In Open Inerest Change negative CALL
Indicate Bullish Setup
 Bearish Setup:
Following are the conditions of Bearish S

1. In Open Interest Distribution there is m

than PUT contracts

2. In Open Inerest Change there are more

PUT contracts

3 In Open Inerest Change negative PUT c

Indicate Bearish Setup

Neutral Setup:
Following are the conditions of Bearish S

1. In Open Interest Distribution there are

distribution of CALL & PUT contracts

2. In Open Inerest Change there are equa

distrubution of CALL & PUT contracts

3 For Neutral condition both Distribution

in Open Interest whould be equally distri

Step 3: FII Data Analysis

USE FII Data TOOL : Click on the below lin

https://docs.google.com/spreadsheets/d

If Bullish value = +1
If Bearish Value = -1

Step 4: Futures Data: https://web.stockedge.co

Bullish Setup:
If Future OI is positive more than +1L+ co
bullish sentiment; below is the example o
 Bullish Setup:
If Future OI is positive more than +1L+ co
bullish sentiment; below is the example o

Bearish Setup:
If Future OI is negative more than -1L+ co
bearish sentiment; below is the example
change

Neutral Setup:
If Future OI change is less than 1L contra
Neutral sentiment; below is the example
change

Step 5: Global Sentiment: https://www.moneyc

How to read Global sentiment?

Bullish if, Majority of INDICES are positiv
Bearish if, Majority of INDICES are negati
Neutral if, equal distribution of global sen

Note: In the below example its indicating

 0% -90% Extreme Bearish
30% -70% Moderate Bearish
30 50% 0% Neutral
20 75% 30% Moderade Bullish
20 90% 70% Extreme Bullish
10
-20 Note:
0.6 The above logic is based on series of backtested
Weekly Hedging trades we traded from past 3
years.
Note:

Enter the value on yellow market area

based on your analysis. Any values altered other than yellow market
data may mis-lead the sentiment

the Market Sentiment?

Setup
1 Hr chart
ve the following chart 50 DMA
200 DMA
INDEX is above 200 & 50 DMA Pivot STD
, INDEX is below 200 & 50 DMA
, INDEX is between 200 & 50 DMA
ample its "Neutral Setup"

erest Analysis : https://www.bloombergquint.com/markets/option-chain

tup:
are the conditions of Bullish Setup:
Bullish
n Interest Distribution there is more PUT Setup
contracts

n Inerest Change there are more PUT than

racts

Inerest Change negative CALL contracts

ullish Setup
etup:
are the conditions of Bearish Setup:
Bearish
n Interest Distribution there is more CALL Setup
contracts

n Inerest Change there are more CALL than

acts

Inerest Change negative PUT contracts

earish Setup

etup:
are the conditions of Bearish Setup:
Neutral
n Interest Distribution there are equal Setup
on of CALL & PUT contracts

n Inerest Change there are equal

on of CALL & PUT contracts

tral condition both Distribution & Change

nterest whould be equally distributed

ata TOOL : Click on the below link to see the FII activity it needs internet connection to load the data from NSE INDIA

ocs.google.com/spreadsheets/d/1nOnszw3pynMO4XGFDOTZZmkMD_5QpzKbi1eArKs9A7M/edit?usp=sharing

ata: https://web.stockedge.com/share/nifty-50/14801?section=future-oi&expiry-date=Cumulative

tup:
OI is positive more than +1L+ contracts its
ntiment; below is the example of OI change Bullish
Setup
tup:
OI is positive more than +1L+ contracts its
ntiment; below is the example of OI change Bullish
Setup

etup:
OI is negative more than -1L+ contracts its
entiment; below is the example of OI Bearish
Setup

etup:
OI change is less than 1L contracts its
entiment; below is the example of OI Neutral
Setup

ntiment: https://www.moneycontrol.com/markets/global-indices/

ead Global sentiment?

Majority of INDICES are positive
, Majority of INDICES are negative
, equal distribution of global sentiment

he below example its indicating Bullish sentiment

10% L
30% L
50% K
70% J
90% J
m NSE INDIA
J
 How to trade Monthly Index Options with Options Chain & Futu

Market
Sentimen Hedging Strategy
ts

Bullish
Neutral
Bearish
th Options Chain & Future OI Combination?

gy Strategy Name

Bull Call Spread

Buy a call and

sell a higher
strike cheaper
call to reduce
premium
 Ironfly Spreads

Sell a put and call

at the same strike
near the stock
price. Your view is
that the stock
wont go down or
up. Buy a lower
Put and a higher
call for protection
on both sides just
in case you're
wrong.
 PUT Calendar
Spreads

Sell near PUT for

current expiry &
Buy same strike
PUT for monthly
Expiry
Combined view of Technical Anlaysis & Options Chain Data
ptions Chain Data Conditions to form the v

Following are the conditions

1. Current spot price of Bank N
Support (highest PUT Historic
Interest) & Resistance (highes
Historical open Interestt) is far
support level.

2. Future Open Interest has in

1,01,725 to 1,27,175 (+26K) o
which confirms strengthening
(refer the Open Interest Anlay
analyze Future open Interest w
trend)
Following are the conditions
View:
1. Current spot price of Bank N
equidistant to resistance (high
Historical open Interest) & sup
PUT Historical open Interestt)

2. If Future Open Interest cha

50K compared to weekly basis
confirms neutral view, (refer t
BN Future IO from 4th Jan & 1
Following are the conditions
View:
1. Current spot price of Bank N
resistance (highest CALL Histo
Interest) & support (highest P
open Interestt) is far compare
level.

2. Future Open Interest has re

16,00,000 to 14,00,000 (-2L) o
which confirms weakening of
the Open Interest Anlaysis Tab
Future open Interest with mar
 Conditions to form the view

e the conditions of Bullish View:

pot price of Bank Nifty is near to
hest PUT Historical open
esistance (highest CALL
en Interestt) is far compared to
l.

en Interest has increased from

1,27,175 (+26K) on weekly basis,
ms strengthening of uptrend,
pen Interest Anlaysis Table to
re open Interest with market
 e the conditions of Neutral

pot price of Bank Nifty is

o resistance (highest CALL
en Interest) & support (highest
al open Interestt) level.

Open Interest change is less than

ed to weekly basis, which
utral view, (refer the example of
O from 4th Jan & 15th Jan)
e the conditions of Bearish

pot price of Bank Nifty is near to

ighest CALL Historical open
upport (highest PUT Historical
tt) is far compared to reistance

en Interest has reduced from

14,00,000 (-2L) on weekly basis,
ms weakening of uptrend, (refer
erest Anlaysis Table to analyze
Interest with market trend)
Future Open Interest Analysis [Stock Edge Website]
 Adjustment Technique

Following are the conditions of Adjustment:

1. If BN breaks Major Support Level (thick Green line) , Sell CALL option at
Minor Resistance level, (@thin Red line)

2. If again BN reverses & breaks minor support level (thin Green line), Close
the sold CALL Option.
No Adjustment in case of Neutral view
Following are the conditions of Adjustment:
1. If BN breaks Major Resistance Level (thickRed line) , Sell PUT option at
Minor Support level, (@thin green line)

2. If again BN reverses & breaks minor resistance level (thin red line), Close
the sold PUT Option.
 How to trade weekly Index Options in 2021?

Market
Sentimen Hedging Strategy
ts

Bullish
Neutral
Bearish
y Index Options in 2021?

gy Strategy Name

Bull Call Spread

Buy a call and

sell a higher
strike cheaper
call to reduce
premium
 Ironfly Spreads

Sell a put and call

at the same strike
near the stock
price. Your view is
that the stock
wont go down or
up. Buy a lower
Put and a higher
call for protection
on both sides just
in case you're
wrong.
 PUT Calendar
Spreads

Sell near PUT for

current expiry &
Buy same strike
PUT for monthly
Expiry
Condition 1: Daily Chart {Super-Trend & Pivot point indicators used with default settings
cators used with default settings} Trend Validation {1Hr chart with Supe

If Hourly chart with Super-T

follows daily chart then follo
mentioned in Daily chart, If n
view
 If Hourly chart with Super-T
follows daily chart then follo
mentioned in Daily chart, If n
view
 If Hourly chart with Super-T
follows daily chart then follo
mentioned in Daily chart, If n
view
tion {1Hr chart with Super-Trend indicator}

hart with Super-Trend indicator

ly chart then follow the View as
in Daily chart, If not take neutral
view
hart with Super-Trend indicator
ly chart then follow the View as
in Daily chart, If not take neutral
view
hart with Super-Trend indicator
ly chart then follow the View as
in Daily chart, If not take neutral
view
 VIX Calculator
Today is 10-Jan-21

And Nifty trading at 32100.00

with VIX of 22
upside Downside
So we can expect Volatility upto 6.35% In this month 34138.62 30061.38
3.05% In this week Which is 33079.32 31120.68
1.38% on this day 32543.98 31656.02
 How to define Hedging strategy based on different Market Sentiments?

Please ZOOM to see in detail

Market Sentiments Hedging Strategy

Extreme Bullish

Moderate Bullish

Neutral
Extreme Bearish

Moderate Bearish
ket Sentiments?

Strategy to Use

Bull Call Spread

Buy a call and sell a higher

strike cheaper call to reduce
premium

CALL Calendar Spreads

Sell near CALL for current

expiry & Buy same strike
CALL for monthly Expiry

Butterfly Spreads

Sell a put and call at the

same strike near the stock
price. Your view is that the
stock wont go down or up.
Buy a lower Put and a
higher call for protection on
both sides just in case
you're wrong.
 Bear Put Spread

Buy a Put, and sell a lower

strike cheaper Put to reduce
premium

PUT Calendar Spreads

Sell near PUT for current

expiry & Buy same strike
PUT for monthly Expiry