What is OI buildup: long buildup, short buildup, short covering and long unwinding?
OI buildup is the reading of price change together with open interest change to tell what traders are doing: price up with OI up is long buildup, price down with OI up is short buildup, price up with OI down is short covering, and price down with OI down is long unwinding.
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What are the four OI buildup types?
Long buildup (price ↑, OI ↑): fresh buying, usually bullish. Short buildup (price ↓, OI ↑): fresh selling, usually bearish. Short covering (price ↑, OI ↓): sellers exiting, a bullish move that can fade once covering ends. Long unwinding (price ↓, OI ↓): buyers exiting, a bearish move that can fade once unwinding ends.
How do you read OI buildup in NIFTY futures?
Compare the futures price and futures OI at the same time of day with the previous close. NIFTY futures up 120 points with OI up 6% is long buildup: the rally has new money behind it. Up 120 points with OI down 4% is short covering: the rally is shorts running for cover and can stall once they are done.
What is OI buildup in options?
For an option, use its own premium. A call whose OI rises while its premium falls is short buildup in that call, which means call writing and resistance. A put whose OI rises while its premium falls is put writing and support. This is the reading behind every option chain level.
Where does AOC show OI buildup?
The CE and PE BuildUp tabs in a strike's OI charts show buildup for that call and put through the day, and the Future Buildup chart tracks futures price against futures OI with the spot line for reference.
