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Disclaimer

This website provides information for educational purposes only and should not be considered financial advice. Investing in or trading securities, including options, involves significant risk and is not suitable for all investors. Do not trade based solely on the information provided on this website.
 

General Investment Risks:

  • Loss of Principal: Investing in securities, including cash, futures, or options, involves risk and could result in the loss of your principal.

  • Individual Responsibility: You are solely responsible for your financial decisions and for verifying the accuracy of all information used in making those decisions.  

  • Consult a Financial Expert: Before making any financial decisions, it is recommended that you consult with a qualified financial advisor.

  • Past Performance: Past performance does not guarantee future returns.
     

Options Trading Risks:
 

​Options Trading Risks and Data Limitations This information is for educational purposes only and should not be considered financial advice. Options trading involves significant risk and is not suitable for all investors. Do not trade based solely on this data.

 

Liquidity and Data Reliability:

  • Data accuracy, including Implied Volatility (IV), is compromised in illiquid options. Avoid trading illiquid options.

  • Nifty, Bank Nifty, and the top 10 stocks generally offer reliable liquidity. The next 40 stocks have moderate liquidity. Beyond these, liquidity and data reliability decrease significantly.

  • The data presented here is most reliable for Nifty, Bank Nifty, and the top liquid stocks within the current expiry cycle.

 

Indicator Limitations:

  • Indicators like Put-Call Ratio (PCR), Max Pain, and IV Percentile (IVP) are not predictive on their own. Their usefulness depends on substantial Open Interest (OI) and trading volume, and they are most relevant for the current expiry after the first few days. They may not be reliable for low-volume or low-OI single stocks.

  • Do not rely solely on these indicators. Use them in conjunction with other analysis tools.

 

Understanding Key Metrics:
 

Open Interest (OI): 

  • OI reflects market sentiment. A buildup in Call OI suggests sellers (often institutions) anticipate a price decrease, creating potential resistance. A buildup in Put OI suggests sellers expect a price increase, indicating potential support.

 

Put-Call Ratio (PCR):

  • PCR compares Put and Call OI. A PCR > 1 (more Puts) is generally bullish, suggesting sellers are more comfortable selling Puts. However, an extremely high PCR (e.g., 1.3+) may indicate an overbought condition and a potential bearish reversal.

  • A PCR < 0.5 (more Calls) is generally bearish. However, an extremely low PCR (e.g., around 0.3) may indicate an oversold condition and a potential bullish reversal.

 

Max Pain:

  • Max Pain theory suggests the price tends to gravitate towards the strike price where option sellers experience minimal losses and buyers experience maximum losses at expiry. This is a theoretical concept and not a guaranteed outcome. Max Pain data for single stocks, especially with limited Put or Call OI, is unreliable.

 

IV Percentile (IVP):

  • IVP compares the current IV to its historical range (typically the past 250 days). A high IVP (e.g., 90%) indicates a relatively high current IV compared to its history.

  • IVP is considered more reliable than IV Rank, which can be skewed by outliers.

  • IVP can be less reliable on Fridays and sometimes Thursdays due to weekend option selling, particularly in the last two weekends before expiry, especially the last one.

  • IVP is less significant during expiry week due to potential IV spikes from price movements and low Vega (sensitivity to IV changes). Expiry week trading is primarily focused on Theta (time decay) and Delta (price sensitivity)


Website Limitations:

  • Educational Purposes Only: This website provides analytical tools for educational purposes only. It is not intended to provide investment or trading advice.

  • No Stock Tips or Suggestions: The website does not provide any tips or stock suggestions, and all analysis is shared for educational purposes only.

  • Data Accuracy: The website does not take responsibility for the accuracy of the data provided, and there may be typographical or other errors and inaccuracies.  

  • Content Changes: The website may change, remove, or add content at its discretion.

  • No Liability: The website is not responsible for any decisions made, gains or losses realized, or psychological or other stress caused by trading. 
     

Note : This disclaimer is intended to provide a general overview of the risks and limitations associated with using this website. It is not exhaustive and may not cover all potential risks or limitations. You should carefully review this disclaimer and consult with a qualified professional before making any investment decisions.

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