Navigating the Open Interest of Options on 7/6: Nikola Struggles to Get Shareholder’s Approval for New Stock: Investors Now Doubt Its Stock Plan
$Nikola(NKLA.US$ stock was down 9% today. Electric truck maker Nikola is still short of winning shareholder approval to issue new stock and has once again adjourned its annual meeting to try to win more support, the company said on Thursday.
The open interest for NKLA's put option with a strike price of $1.0000 and an expiration date of 8/18/23 increased by 50,498, the most today, indicating a growing bearish sentiment among investors.
The most decrease in the open interest today came to $Petroleo Brasileiro SA Petrobras(PBR.US$'s put option with a strike price of $13.00 and an expiration date of 7/21/23, which could suggest that more investors are expecting the stock price to rise to the strike price by the expiration date.
The OI PCR of $BorgWarner(BWA.US$ surged by 154.6% to 1.00 today, the highest increase in the market.
The OI PCR of $Fidelity National Information Services(FIS.US$ dropped by 26.1% to 0.43 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.
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