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Open Interest Analysis on May 31: Top Options Change In Open Interest

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Options Newsman wrote a column · May 31, 2023 15:57
Today, the open interest of $Apple(AAPL.US)$ call options experienced a substantial increase of 30,994 contracts, signaling bullish sentiment among traders. This surge in open interest is the largest seen today.
Open Interest Analysis on May 31: Top Options Change In Open Interest
The open interest put/call ratio in $Cooper Companies(COO.US)$jumped the most, with an increase of 44.3% to an OI PCR of 0.46 compared to the previous day. That could suggest a build-up of bearish sentiment in the market ahead.
The sentiment in $Hewlett Packard Enterprise(HPE.US)$ has been seen to turn positive compared to the previous day, with OI PCR falling the most by 28.1% to a level of 0.60.
Open Interest Analysis on May 31: Top Options Change In Open Interest
What is Open Interest Put Call Ratio? An indicator to help with market sentiment analysis within specific time-frames.
OI PCR can be used to determine market sentiment -- if it is greater than 1, it is considered bullish, and if it is lower than 1, it is considered bearish. And computed by total open interest of all the puts divided by total open interest of all the calls.
Its utility, however, goes beyond this simple interpretation. The OI PCR can be used to determine market sentiment. If the OI PCR is greater than 1, it is considered bullish, and if it is lower than 1, it is considered bearish. However, its utility goes beyond this simple interpretation. The indicator can detect the dangerous consensus we discussed earlier, which can lead to drastic price movements.
To provide context, when the OI PCR goes significantly above 1, it indicates a shift from a bullish sentiment to an extremely bullish sentiment. Similarly, if the OI PCR is close to 0, it suggests an extremely bearish mood.
Disclaimer:
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Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more
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