Navigating the Open Interest of Options on 6/20: Rivian's Open Interest Changed the Most Today as It Announced to Use Tesla’s Charging Network
$Rivian Automotive(RIVN.US$ shares jumped by 5.51% today, as it announced a deal to expand access to Tesla’s fast-chargers to drivers of its vehicles. Its change of open interest in options soared by 34,475, the largest increase of the day, signaling more optimism among traders for the stocks.
The market saw the largest fall of 22,628 today for the open interest of $SoFi Technologies(SOFI.US$. This also brought down the overall open interest of its options to 55,263.
The OI PCR of $Ceridian HCM Holding(CDAY.US$ surged by 204.4% to 3.72 today, the highest increase in the market.
The OI PCR of $Arch Capital(ACGL.US$ dropped by 73.8% to 1.70 today, the largest fall in the market. This indicates that the sentiment in the stock has become more positive than the previous day.
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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Macdonell J : what is the OI PCR for SOFI as of June 22?