Impact of Open Interest

In: Business and Management

Submitted By monikaghosh
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Pages 4
SUMMER INTERNSHIP PROGRAMME
PROJECT PROPOSAL

Submitted By:Name:- Triptasree Ghosh Enrollment No:- 10BSPHH010843 Mobile No:- 09674386032 E-mail Id:- triptasreeghosh03@gmail.com

I.

PROJECT PROPOSED:

“IMPACT OF OPEN INTEREST ON EQUITY MARKET TRENDS”

II.

DESCRIPTION OF THE PROJECT IN BRIEF:
This project has been initiated for the purpose of acquainting me with the basics of the financial terminologies used in the stock markets along with the in-depth knowledge on how derivatives work and the impact of open interest on options. One of the most important concepts of the Derivatives Market is ‘Open Interest’. Open Interest (OI) is the total number of outstanding futures/options contracts that are not closed or delivered on a particular day. The project is mainly based on the study of the open interest and how it affects the equity market trends. OI stands to be an useful indicator of the market trends. Increasing OI indicates increased flow of money and thus strengthening of present market trend. Decreasing OI indicates reduced money flow and thus weakening the current trend. Sudden increase or decrease in the open interest position indicates higher market volatility in the near future. This project is a detailed study of OI positions of NIFTY options. The main focus is on forming NIFTY Options Strategy for investors who want to play in the NIFTY options with minimal risk. I will dedicate the initial phase of the project in knowing how the stock market functions and how derivatives play a very important role in minimizing risk. The project is divided into two phases. The first phase is mainly based on collection of two years options data from the NSE website. Then the data will be sorted-out based on OI positions. After that a strategy will be formulated where in net profit or loss obtained through this strategy will be calculated. As per the strategy,…...

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