Preface

Welcome to the e-book Zero Hero, where I share insights

gained from over 8 years of experience in trading futures and
options. Throughout my journey, I have honed my skills in
deciphering market sentiment through a meticulous analysis of
various data points. By leveraging tools like premium
disparity, OI OBZ OI OSZ, PCR OBZ PCR OBZ, Open
Interest datapoints, and more, I have developed a robust
strategy for understanding and predicting market direction.

In this e-book, I delve into the depths of my methodology,

offering a comprehensive breakdown of how these data points
shape my trading decisions. By uncovering the intricacies and
nuances of market behaviour, I aim to empower traders like
yourself to navigate the complexities of futures and options
with confidence.

I invite you to embark on this journey with me, as we explore

the world of trading through the lens of data-driven analysis.
May the knowledge shared within these pages be a guiding
light on your path to success in the dynamic realm of financial
markets.

Acknowledgments

I would like to express my heartfelt gratitude to everyone who

contributed to the creation and publication of this e book. Your
support, encouragement, and assistance have been invaluable,
and without your help, this project would not have been
possible.
First and foremost, I extend my deepest thanks to my family
and friends for their unwavering belief in me and their
constant encouragement throughout this journey. Your words
of encouragement and understanding during those moments of
self-doubt kept me motivated to push forward.
I want to take a moment to express my sincere gratitude to the
developers of the incredible free tools. Your dedication to
crafting these valuable resources has made a significant impact
on my trading life and success.
The ease of use and functionality of these tools have been
nothing short of impressive. They have not only saved me
valuable time but have also empowered me to achieve more
than I thought possible.
Your generosity in offering these tools for free is truly
commendable. It is heartening to see developers like you who
are passionate about making a positive difference in the lives
of others.
Finally, I want to express my gratitude to the readers who take
the time to engage with this work. Your feedback and
enthusiasm for the book are truly humbling and inspiring.
To all those who have been a part of this journey, whether
directly or indirectly, thank you from the bottom of my heart.
Your belief in this project has made it a reality, and I am
forever grateful for your presence in my life.

With deepest appreciation,

Marketman.
Disclaimer:
Trading futures and options involves substantial risk and is not
suitable for everyone. The strategies discussed in this e-book
are based on personal experience and should not be considered
as financial advice. Always conduct thorough research and
consult with a qualified financial professional before making
any investment decisions.

Index

Chapter 1: The Foundation of Data-Driven Analysis

Chapter 2: The Power of Premium Disparity

Chapter 3: Unveiling Open Interest Datapoints

Chapter 4: The Power of PCR OBZ and PCR OSZ

Chapter 5: Free tools to track data points

Chapter 6: Trading setup/ Strategy

Chapter 7: Conclusion
Chapter 1: The Foundation of
Data-Driven Analysis

Financial markets are dynamic and subject to frequent

changes. A data-driven trading setup equips traders with the
tools and methodologies needed to adapt to shifting market
conditions. By constantly analysing data and monitoring
market trends, traders can identify emerging opportunities and
adjust their strategies accordingly. This adaptability is crucial
in a landscape where market dynamics can change rapidly, and
staying ahead of the curve is essential for success.
Improved Efficiency and Confidence
A data-driven trading setup streamlines the decision-making
process, leading to improved efficiency. Traders who have the
proper knowledge to analyse data in real-time can identify
trading signals, and execute trades accordingly. This
eliminates human error, and enables traders to take advantage
of opportunities quickly.
Additionally, a data-driven approach instils confidence in
traders. The reliance on objective data and statistical models
removes much of the emotional biases and guesswork. Traders
can trust the analysis and insights derived from their setup,
giving them the confidence to execute trades with conviction
and discipline.
In an era characterized by an abundance of data, a data-driven
trading setup is indispensable for traders seeking consistent
success. By harnessing the power of data analysis, traders can
make informed decisions, manage risks effectively, and adapt
to changing market conditions. A data-driven approach
improves efficiency, eliminates emotional biases, and instils
confidence in traders. Embracing a data-driven trading setup is
no longer an option but a necessity for traders who strive for
excellence in the highly competitive world of financial
markets.

Chapter 2: The Power of Premium

Disparity

Importance of Premium
As an option trader we trade premium So, we need to pay
close attention to the Premium, it can tell us lot of stories.
Watch closely the way premium build up and erode
Focusing on premium distribution can turn some of the odds in
favour of us.

The generic premium distribution in the market.

In an ideal market ATM and near OTM calls will be expensive
and puts will be slightly cheaper.
As we go farther from strike calls will be cheaper but puts
become expensive compared to the corresponding calls on the
opposite side.

1. Premium Disparity Calls

In certain market scenarios, particularly when there is a strong
bullish view, we may observe a unique situation where at-the-
money (ATM) and near out-of-the-money (OTM) call options
are priced lower than put options. In such cases, the advantage
of purchasing call options lies in the opportunity to leverage a
potentially profitable position while paying a reduced
premium, thereby achieving an improved risk-reward ratio.
When call options are priced attractively, investors with a
bullish outlook may find buying call options appealing due to
the following reasons:

Cost Efficiency: The lower premium on call options

compared to put options reduces the initial investment
required to establish the position. This cost-efficient approach
allows investors to participate in the potential upside of the
underlying asset at a lower financial outlay.

Leverage: Call options offer the potential for greater leverage

compared to directly purchasing the underlying asset. With a
smaller upfront investment, investors can control a larger
position in the underlying asset through call options,
potentially amplifying returns if the asset’s price rises.

Limited Risk: By purchasing call options, investors limit their

risk exposure to the premium paid. In the event the market
moves against the bullish view, the maximum loss is restricted
to the amount invested in the call options, providing a
predefined risk level.

Enhanced Risk-Reward Profile: The combination of reduced

premium and the potential for significant gains if the
underlying asset’s price rises creates a more attractive risk-
reward profile. This aligns with a bullish outlook, as investors
can potentially benefit from favourable market movements
while controlling downside risk.

Flexibility: Call options provide flexibility, allowing investors

to adjust their positions as market conditions change. They can
choose to hold, sell, or exercise the call options based on
evolving market trends and their investment objectives.
 2. Premium Disparity Puts

In circumstances where put options are priced substantially

lower than call options, presenting an opportunity where at-
the-money (ATM) and near out-of-the-money (OTM) put
options are attractively priced, investors with a bearish market
view can capitalize on this advantageous situation.
Purchasing put options in such a scenario offers several key
benefits:

Cost Efficiency: The lower premium on put options relative to

call options results in a more cost-efficient approach. By
paying a reduced upfront premium, investors can establish
bearish positions with less capital outlay compared to short-
selling the underlying asset.

Profit Potential: In a bearish market outlook, the value of put

options rises as the price of the underlying asset declines. The
potential for substantial profits increases as the asset’s price
moves further downward, allowing investors to capitalize on
market downturns.

Limited Risk: The maximum risk exposure in buying put

options is limited to the premium paid for those options. This
capped risk provides a clear and predetermined level of
potential loss, even if the market moves against the bearish
view.

Enhanced Risk-Reward Profile: The combination of lower

premium costs and the potential for significant gains if the
underlying asset’s price decreases creates an appealing risk-
reward profile. This aligns with a bearish outlook, as investors
can potentially benefit from downward market movements
while having well-defined risk parameters.
Diversification and Hedging: Buying put options can serve
as an effective hedging tool to protect existing long positions
in the portfolio against market downturns. It allows investors
to reduce overall portfolio risk and potentially offset losses in
other investments.

Flexibility: Put options offer flexibility in managing bearish

positions. Investors can choose to hold, sell, or exercise the put
options based on evolving market conditions and their
investment objectives, providing strategic agility in response
to changing market dynamics.

How to Find Disparity

NSE option Chain
See this Calls are extremely cheaper than
the Puts, if you are bullish and all other
indicators bullish signal you can buy call
options here.
How I practically use Premium Disparity?

I create separate watchlist for Call Strikes and Put Strikes like
this.

Watchlist of Call strikes. See the premium Calls are extremely

cheaper than the Puts.

Watchlist of Put strikes. Puts are extremely Expensive than

calls.
What direction will the market take?

NOTE: Please note that if the call options are extremely

cheaper than the puts, it does not necessarily imply that
the market will go up. Always consider other parameters
as well before making any assumptions.
Chapter 3: Unveiling Open Interest
Datapoints

Future Open Interest (OI) analysis is a valuable tool used by

traders and analysts to gauge market participation and
sentiment in financial markets. It provides insights into the
total number of outstanding contracts (futures or options) that
have not been closed or delivered by the end of a trading
session. By studying the changes in Open Interest over time in
certain zones, market participants can gain a deeper
understanding of the prevailing sentiment and potential market
trends. Here we are analysing the open interest build ups in
two zones.
1. Future Open Interest Build ups in Over Sold Zone
2. Future Open Interest Build ups in Over Bought Zone

How to Find Over Sold Zone and Over Bought Zone?

The Relative Strength Index (RSI) is a popular technical

indicator used by traders and analysts to assess the momentum
and potential overbought or oversold conditions of an asset’s
price. RSI values range from 0 to 100 and are calculated based
on the speed and change of price movements over a specified
period.
Overbought Zone:
When the RSI value rises above 70, it is in the overbought
zone. An overbought condition implies that the asset’s price
has been rising rapidly and may have moved too far, too
quickly. It suggests that the asset may be due for a potential
price correction or even a reversal. Traders interpret the RSI’s
overbought signal as a warning sign that the asset is likely to
be overvalued, and there could be a possibility of a price
pullback.
Oversold Zone:
When the RSI value falls below 30, it is in the oversold zone.
An oversold condition indicates that the asset’s price has
declined rapidly and may have fallen too far, too quickly. It
suggests that the asset may be undervalued, and there could be
a potential price bounce or a reversal soon. Traders view the
RSI’s oversold signal as an opportunity to consider buying the
asset at a potentially favourable entry point.

How to club the Future OI with RSI?

1. What is happening in Over Sold Zone?

An increase in Future Open Interest (OI) within the oversold
zone of the Relative Strength Index (RSI) can offer valuable
insights into market dynamics and potential shifts in
sentiment. When the RSI enters the oversold zone (typically
below 30), it signifies that the asset’s price has experienced a
sharp decline and may be undervalued. At this point, the
increase in Future OI suggests that demand is generating, with
institutions seemingly accumulating the stock at a more
attractive, discounted price.

In such a scenario, the rise in Future Open Interest indicates

heightened interest from market participants, particularly
buyers seeking to capitalize on the perceived undervaluation.
This accumulation by buyers can result in increased OI as new
positions are established or existing ones are rolled over to
take advantage of the favourable pricing.

From a professional standpoint, analysing Future Open

Interest in conjunction with RSI signals can enhance trading
strategies and decision-making processes. Recognizing the
significance of Future OI growth within the oversold zone
provides traders with valuable cues about the underlying
market sentiment and the potential for a bullish reversal.
However, traders should exercise prudence and supplement
this analysis with other technical indicators, fundamental
factors, and market news to ensure a well-rounded assessment.

It is important to acknowledge that market dynamics are

multifaceted, and while an increase in OI at oversold levels
suggests buyers are dominating the scene, comprehensive
analysis remains essential. Market conditions can be
unpredictable, and traders should employ risk management
practices to safeguard against adverse outcomes. By
combining a nuanced approach to OI analysis with other tools,
traders can navigate the markets with greater confidence,
optimizing their trading strategies for improved results.

2. What is happening in Over Bought Zone?

When the RSI enters the overbought zone (typically above

70), it indicates that the asset’s price has experienced a
rapid increase and may be overvalued. In this context, an
increase in Future OI suggests that supply is generating,
with sellers seemingly taking advantage of the elevated
prices.

In such a scenario, the rise in Future Open Interest points to

heightened interest from market participants, particularly
sellers looking to capitalize on the perceived overvaluation.
This increase in Future OI occurs as new short positions are
established or existing ones are rolled over, reflecting the
prevailing sentiment that the asset’s price may be due for a
correction. Recognizing the significance of OI growth
within the overbought zone provides traders with valuable
 cues about the underlying market sentiment and the
potential for a bearish reversal.

Here are some examples…

How to adjust your trading approach when this setup

fails?
Significant put writing functions as a support, while
substantial call writing operates as a resistance. In this
situation, the market might experience upward movement
despite being in an overbought state, accompanied by a
prolonged accumulation of long positions. Likewise, a
downward market trend could occur when the price is oversold
and there is a surge in future open interest. Monitor the Open
Interest data using tradingtick.com. If a substantial disparity in
OI is observed, focus exclusively on trades that align with the
prevailing trend, and avoid counter trades.

At 10.30 am in Bank Nifty a significant gap emerges between

Call Open Interest (OI) and Put Open Interest (OI). For
instance, in this illustration, the difference between Call OI
and Put OI surpasses 1 crore. When encountering such
scenarios, it is advisable to refrain from engaging in counter
trades.

Chapter 4: The Power of PCR

OBZ and PCR OSZ

In the dynamic world of financial markets, successful traders

rely on a variety of tools and techniques to make informed
decisions and identify profitable opportunities. One such
method that has gained popularity in recent years is PCR
(Put/Call Ratio) analysis. PCR analysis provides traders with
valuable insights into market sentiment and can be a powerful
tool for predicting potential shifts in market trends. In this
chapter, we will delve into the basics of PCR analysis, explore
its significance in trading, and understand how it can be
effectively used to enhance trading strategies.

Understanding PCR Analysis

The Put/Call Ratio, commonly known as PCR, is a

straightforward yet effective technical indicator that compares
the trading volume of put options to call options in the
financial markets. Put options are contracts that provide the
holder the right, but not the obligation, to sell a security at a
predetermined price (strike price) within a specified time
frame. Conversely, call options grant the holder the right to
buy a security at a predetermined price within a specified time
frame.

PCR is calculated by dividing the total volume of outstanding

put options by the total volume of outstanding call options for
a particular stock, index, or financial instrument. The resulting
ratio offers valuable insights into the prevailing sentiment of
investors in the market.

Interpreting PCR Ratios

PCR Over Sold Zone

Generally, PCR below 0.5 is considered as Over Sold Zone but
in my experience PCR below 0.65 can be considered as the
Over Sold Zone (in NIFTY and BANKNIFTY), A low PCR
ratio indicates that call options are significantly more popular
than put options. This suggests that the market sentiment is
optimistic, as investors are predominantly betting on rising
prices. It could indicate a potential overbought market
condition and may signal an upcoming correction or reversal.

PCR Over Bought Zone

Generally, PCR above 1.0 is considered as the Over Bought
Zone but in my experience PCR above 1.20 can be considered
as the Over Bought Zone. A high PCR ratio signifies that put
options are in higher demand compared to call options. This
suggests a pessimistic sentiment prevailing in the market, with
investors hedging their positions or betting on declining prices.
A high PCR ratio may indicate an oversold market condition
and could signal a potential rebound or reversal.

PCR Analysis in Trading

In my trading approach, I focus exclusively on analysing PCR
ratios within the context of overbought and oversold zones.
Traders and analysts use PCR analysis to gain valuable
insights into market sentiment and anticipate potential shifts in
trends. By incorporating PCR data into their analysis, traders
can:

Identify Trend Reversals:

A significant change in PCR ratios may act as a leading
indicator for an impending trend reversal. If the market is
excessively bullish (low PCR) or bearish (high PCR), it could
signal an upcoming price correction or trend reversal.

Confirming Market Sentiment:

PCR analysis can confirm or contradict other technical
indicators and patterns. When technical indicators point
towards a specific market sentiment, a corresponding PCR
ratio can provide further evidence to support or challenge the
prevailing view.

Timing Entry and Exit Points:

By observing shifts in PCR ratios, traders can make better
decisions regarding their entry and exit points in the market.
Entering a position during extreme market sentiment (high or
low PCR) might lead to more favorable risk-reward
opportunities.

Risk Management:
High PCR ratios may indicate periods of increased market
uncertainty and volatility. Traders can use this information to
adjust their risk management strategies and position sizing
accordingly.

Limitations of PCR Analysis

While PCR analysis is a valuable tool, it is essential to
recognize its limitations
1. Limited Timeframe: PCR analysis offers valuable
insights into the prevailing short-term market
sentiment, making it a useful tool for intraday
trading strategies. However, it is important to
acknowledge that its effectiveness in predicting long-
term trends may be limited.
2. Context Matters: PCR ratios should be analysed in
the context of other technical and fundamental
indicators to avoid misinterpretation.
PCR analysis has emerged as a powerful tool in the trading
world, offering valuable insights into market sentiment and
potential trend shifts. By understanding and utilizing PCR
ratios effectively, traders can make more informed decisions,
improve their timing, and enhance their overall trading
strategies. However, it is crucial to integrate PCR analysis
with other technical and fundamental tools to build a
comprehensive trading approach. As with any trading tool,
proper risk management and continuous learning are essential
to capitalize on the benefits of PCR analysis in the ever-
changing landscape of financial markets.

Please refer to the charts provided below as an illustrative

example.

When the BANKNIFTY PCR entered the oversold zone (PCR

0.62), it subsequently recorded a notable 248-point rally in the
spot chart.

Upon reaching the PCR overbought zone, the BANKNIFTY

index experienced a significant 502-point decline in the spot
chart.
Chapter 5: Free tools to track data
points

In today’s fast-paced financial markets, accurate and efficient

data tracking tools play a crucial role in making informed
trading decisions. Several free tools have emerged, providing
traders with access to real-time data and analytical capabilities.
Among these, notable platforms such as tradingtick.com,
sensibull.com, and niftytrader.in offer valuable services to
market participants. Additionally, the integration of advanced
indicators like Smart Money Concept by luxalgo, Natural
Square Level, and The Golden Pivot enhances the precision of
financial analysis. In this chapter, we will explore these free
data tracking tools and delve into the significance of the
indicators in professional trading.

Free Data Tracking Tools:

tradingtick.com:
tradingtick.com is a comprehensive data tracking tool that
provides real-time market data. Its user-friendly interface
facilitates swift access to essential market information,
enabling traders to monitor price movements, open interest,
PCR levels, call vs put OI etc. which helps the trader stay
informed about market trends. The platform’s historical data
help you to back test the concepts explained in this book.

sensibull.com:
sensibull.com is a powerful options trading platform that
offers advanced data analytics and risk management tools. It
enables traders to analyse option strategies, gauge implied
volatility, and assess potential profits and losses. The
platform’s option chain analysis and scenario simulation
features are particularly valuable for derivatives traders
seeking data-driven insights.

niftytrader.in:
niftytrader.in caters to traders interested in the Indian stock
market, providing real-time NSE and BSE data. The
platform’s technical charts, market heat maps, and stock
screeners empower users to identify potential investment
opportunities and monitor market performance effectively.

Indicators for Enhanced Analysis:

1. Smart Money Concept by luxalgo:

The Smart Money Concept is an advanced trading indicator
developed by luxalgo, designed to identify institutional trading
patterns and significant market moves. The Smart Money
Concept indicator offers traders valuable information about
premium and discount areas. By identifying these areas,
traders can better understand market sentiment and gauge
potential price movements. This note explores the significance
of the Smart Money Concept indicator for discerning premium
and discount areas on different timeframes and its implications
for trading strategies. This indicator’s calculation is based on
advanced algorithms that account for institutional trading
patterns, allowing traders to discern areas where professional
traders are actively participating.

The concept of “smart money” accumulation and distribution

is often associated with institutional or sophisticated investors
who have significant resources and expertise. These investors
aim to buy assets when they are discounted and sell or unload
them when they are trading at a premium. This strategy is
known as “buy low, sell high,” and it aligns with the
fundamental principle of value investing.

Let us explain the process of smart money accumulation and

distribution in more detail:

Smart Money Accumulation:

When the price of an asset is trading at a discount, it means
that the asset is relatively cheaper than its perceived intrinsic
value or fair market value. During these periods, institutional
investors or smart money participants view the asset as
undervalued and, thus, an attractive investment opportunity.
They start accumulating or buying the asset in large volumes,
anticipating that its price will rise in the future as the market
recognizes its true value. The process of smart money
accumulation can lead to increased buying pressure, which
may drive the price of the asset higher. As a result, the asset
starts moving out of the discount zone and into a premium
area.

Smart Money Distribution:

Conversely, when the price of an asset is trading at a premium,
it means that the asset is relatively expensive compared to its
intrinsic value. During these periods, smart money investors
perceive the asset as overvalued and may start unloading or
selling their positions. Smart money participants aim to
capitalize on the higher prices in the premium area by selling
their accumulated positions. This selling pressure can lead to a
decline in the asset’s price as it moves out of the premium
zone and back into the discount area. The process of smart
money distribution can lead to increased selling pressure,
potentially driving the price of the asset lower, as the market
adjusts to the perceived overvaluation.
In conclusion the smart money accumulation and distribution
strategy involves identifying assets that are trading below or
above their intrinsic value and making investment decisions
accordingly. Smart money participants aim to accumulate
assets when they are discounted and unload them when they
are trading at a premium, seeking to profit from the price
movements. By understanding these patterns and tracking
premium and discount areas, traders can gain valuable insights
into the potential direction of the market and align their
strategies with the behaviour of institutional investors.
However, it is essential to remember that market dynamics are
complex, and multiple factors influence asset prices.
Therefore, traders should use the concept of smart money
accumulation and distribution in conjunction with other
analysis tools to make well-informed decisions.

2. Natural Square Level:

The Natural Square Level is a mathematical concept used to
identify potential support and resistance levels in financial
markets. Based on the natural square numbers (1, 4, 9, 16, 25,
etc.), this indicator highlights price levels where market forces
may cause trends to reverse or strengthen. Traders often use
these levels in conjunction with other technical analysis tools
to validate potential entry and exit points.

3. The Golden Pivot:

In the realm of technical analysis, identifying reliable support
and resistance levels is paramount for making informed
trading decisions. The Camarilla Pivot Points offer a unique
approach to defining these key levels, with the L1 and H1
levels holding particular significance. Moreover, the area
between L1 and H1, also known as the trading zone, plays a
vital role as a dynamic support and resistance region. Traders
often rely on this zone to gauge price reactions, validate entry
and exit points, and assess market trends. This note explores
the importance of the area between L1 and H1 as a crucial
trading zone and its implications for traders in various market
scenarios.
Understanding the Trading Zone:

The area between the L1 and H1 levels of Camarilla Pivot

Points creates a trading zone that encapsulates a range of
prices where the market often experiences notable reactions.
This zone acts as an intermediate support and resistance
region, reflecting the battle between buyers and sellers. When
the price approaches this zone, traders closely monitor how
market participants respond, as it can provide valuable insights
into the market sentiment and potential price movements.

Support Role:
When the price falls into the trading zone from above, the area
between L1 and H1 acts as a potential support level. Market
participants who missed earlier opportunities to enter at lower
levels may find this region appealing for initiating long
positions. Consequently, an increase in buying pressure at this
zone can lead to price bounces or reversals, making it an
attractive area for traders to consider for potential long trades.

Resistance Role:
Conversely, when the price rises into the trading zone from
below, the area between L1 and H1 becomes a potential
resistance level. Traders who missed opportunities to sell at
higher levels may view this region as an attractive area to enter
short positions. Subsequently, a surge in selling pressure at this
zone can cause price pullbacks or reversals, making it an
important region for traders to watch for potential short trades.

Confirmation of Breakouts and Trend Continuation:

The trading zone also serves as a confirmation zone for
potential breakout scenarios. If the price convincingly breaks
above the H1 level or below the L1 level, and closes outside
the trading zone, it can signal a strong breakout or trend
continuation potential in the respective direction. This
confirmation can offer traders additional confidence in their
trading decisions.
In conclusion, the area between the L1 and H1 levels of
Camarilla Pivot Points represents a significant trading zone
that acts as both support and resistance. This dynamic region
reflects market participants’ sentiment and behaviour, making
it an invaluable tool for traders seeking to validate entry and
exit points, confirm trends, and assess potential price reversals.
By incorporating the trading zone into their technical analysis,
traders can enhance their decision-making process and
increase their chances of success in the ever-changing
financial markets. However, like any trading tool, it is
essential for traders to use the trading zone in conjunction with
other indicators and risk management strategies to achieve
consistent results.

In conclusion free data tracking tools like tradingtick.com,

sensibull.com, and niftytrader.in have become invaluable
resources for traders seeking real-time market data and
analysis. Moreover, the integration of advanced indicators
such as Smart Money Concept by luxalgo, Natural Square
Level, and The Golden Pivot has enhanced the precision and
depth of financial analysis. As traders continue to harness the
power of technology and innovative indicators, the potential
for making well-informed and strategic trading decisions is
significantly increased. However, it is essential for traders to
exercise caution and rely on a combination of data-driven
insights and fundamental analysis to achieve consistent
success in the dynamic world of financial markets.

Chapter 6: How to make a Trading

setup
When analysing the market, I rely on futures charts to study
the data points and gain insights into future price movements.
Futures charts provide valuable information about price trends,
volumes, and market sentiment.
However, when it comes to making actual entry points, I
prefer to use spot prices rather than futures. Spot prices
represent the current market value of an asset without any
future contract considerations. Since strike prices for options
are derived from the spot prices of the underlying assets, using
spot prices for entry points provides a more accurate
assessment of the asset’s current value.
By utilizing spot prices, I can make more informed decisions
when entering positions in the market. Spot prices offer a real-
time reflection of the asset’s worth, considering current market
conditions and factors that may impact its value.
Therefore, I combine the valuable information from futures
charts with spot prices to make well-informed and timely entry
points, ensuring that my trading strategies are based on the
most accurate and up-to-date market data available.
When analysing the market, it is important to consider the
mentioned data points in the previous chapters with respect to
Nifty and Bank Nifty. To gain a comprehensive understanding,
observe the Nifty and Bank Nifty charts side by side and
simultaneously check the relevant data points. By doing
this, you can better discern the market direction.
While evaluating the data, it is crucial to focus on premium
disparity between call and put options. This means comparing
the difference in prices between call options and put options of
similar strike prices and expiration dates. A significant
disparity in premium values can indicate potential market
sentiment and directional bias.
However, it is essential to remember that premium disparity
alone cannot provide a conclusive market direction. Other
factors such as overall market trends, economic indicators,
geopolitical events, and global market sentiments also play
crucial roles in determining market movements.
By integrating premium disparity analysis with a holistic
approach to market research, you can make more informed
decisions and gain deeper insights into potential market
directions. Always remember to consider a diverse range of
indicators and data points to enhance the accuracy of your
market analysis.

NOTE: If you have any uncertainties regarding the settings of

indicators and data points, I recommend watching this
YouTube channel for more comprehensive information. It
provides valuable insights and guidance on how to effectively
configure indicators and utilize data points to enhance your
market analysis and trading strategies.
https://www.youtube.com/@zerohero_optionshandbook

Chapter 7: Conclusion

As we reach the end of this e-book, I hope that the knowledge

shared within these pages has shed light on the power of data-
driven analysis in futures and options trading. By mastering
the art of deciphering market sentiment through premium
disparity, open interest data points, and PCR, you can navigate
the dynamic world of financial markets with confidence.
Remember, success in trading requires a continuous learning
mindset and diligent application of the strategies outlined in
this book. May your journey be filled with prosperous trades
and informed decisions.