Implied volatility(IV)- volatility of the underlying asset over the future till expiry based on market participants
Volume- total number of contracts that are created in one single trading day.
Open Interest (OI)- Total number of open position contracts
Put call Ratio (PCR) - Volume/OI of put options relative to Volume/OI of call option
PCR - > 1 … Market mood is Bearish as there are more put options , so it can also be there's gonna be a bullish reversal if market is extremely Bearish.
A good example is Market is extremely Bearish in APRIL 2020, then a bullish reversal is seen in JUNE till SEPTEMBER 2020
PCR - 0.7 to 1. Market is in consolidation/ Netural. So there could be Bullish or Bearish reversal.
PCR - <0.7. Market mood is Bullish, i.e. there are more call options . So there could be a Bearish reversal if market is extremely bullish.
A Good example is Market is extremely bullish in DECEMBER 2021. But a Bearish reversal is seen in APRIL 2022.
Maximum pain- point at price of the underlying asset moving towards the strike price where there are more of contracts in favour of writers. Basically Options are always termed in favour of writers… so least amount of loss to writers and maximum loss to buyers
OPTION GREEKS
DELTA - the rate of change in option price based on single point change in the underlying asset price
Gamma - rate of change in delta based on 1 point change in the underlying asset price
Vega - the rate of change in option price based on single point of change in the underlying implied volatility (IV).
Theta- rate of change in option price based on change in time to expire. Basically option price loses values when option is nearing to expire i.e time decay
Rho - Rate of Change in the option price based on change in risk free interest rate.