Open interest
DerivativesThe total number of derivative contracts outstanding and not yet settled.
In plain terms
Rising open interest with rising price suggests new money entering, not just position squaring.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 12 terms
Participant-wise open interest
DerivativesDaily exchange data showing how each category of participant is positioned across index and stock derivatives.
In plain terms
Cash selling alongside a growing long futures position is a different story from cash selling alongside growing shorts. Published free, read by almost nobody.
Ban period
DerivativesAlso called: F&O ban
The state a stock enters when derivatives open interest crosses 95% of its market wide position limit, during which only position-reducing trades are permitted.
In plain terms
The 8:40 local at Dadar with the guard on the door — people can still get off, nobody can board. It lifts only below 80% utilisation, so a rally on falling open interest in a banned name is shorts leaving, not the market forming a view.
Long buildup
DerivativesRising price accompanied by rising open interest — new long positions being opened rather than existing ones changing hands.
In plain terms
The genuinely bullish combination, because new money is entering rather than contracts passing between existing holders.
Market wide position limit
DerivativesAlso called: MWPL
A cap set by the exchange on the aggregate derivatives open interest permitted in a single stock, expressed as a number of shares.
In plain terms
It stops the derivatives tail growing large enough to wag the cash market. The basis on which it is computed has been revised, so read the current circular for the formula — what has not changed is that the names reaching the ceiling are overwhelmingly midcaps with concentrated promoter holdings and thin deliverable float.
Near-month contract
DerivativesAlso called: Front month, Current month contract
The listed futures contract with the closest expiry, which ordinarily carries most of the volume and open interest in the family.
In plain terms
The instrument your order actually joins. Levels, entries and stops belong on its chart; the spliced continuous chart is for shape and trend.
Option chain
DerivativesThe strike-by-strike table of open interest, change in open interest, volume and implied volatility for an underlying's options, published live and free by the NSE.
In plain terms
The strike with the largest call open interest often acts as resistance and the largest put strike as support, because writers hedging those positions generate real buying and selling. One source of confluence, not a forecast.
Put-call ratio
DerivativesAlso called: PCR
Open interest in puts divided by open interest in calls, read contrarily as a gauge of crowd positioning.
In plain terms
Open interest does not record intent. Heavy put positioning is often institutions selling puts at a strike they are happy to buy at — bullish positioning that a naive reading reports as fear.
Roll method
DerivativesAlso called: Roll rule, Roll date
The rule a data vendor uses to decide when a continuous series stops following one futures contract and starts following the next — on expiry, a fixed number of days before it, or when volume and open interest migrate.
In plain terms
A second undisclosed choice on top of the adjustment method. It changes which sessions appear on your chart at all, so two platforms can disagree about the candles as well as the levels.
Short covering
DerivativesExisting short positions being closed by buying back, visible in the data as price rising while open interest falls.
In plain terms
A rally with no new buyer behind it. It has a natural end point — when the covering finishes, so does the move.
Max pain
DerivativesThe strike at which the largest rupee value of options would expire worthless, causing the greatest aggregate loss to option buyers.
In plain terms
There is a partial mechanism — writers hedging their exposure do exert some pull near expiry — but it is weak, easily swamped by news, and it recalculates as open interest shifts.
Short interest
Technical analysisA periodically published figure for the total shares sold short in a security, standard in the United States and not published in that form here.
In plain terms
There is no Indian days-to-cover statistic to look up. A crowded short position shows up in derivatives open interest instead.