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en:d.p.d
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en:d.p.d [2016/08/30 12:19] playoptions [Example] |
en:d.p.d [2017/02/22 11:41] (versione attuale) playoptions [D.P.D. - Defense Point Distribution] |
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| - | ===== D.P.D. - Defense Distribution Point ===== | + | =====D.P.D. - Defense Point Distribution===== |
| - | The Open Interest is exceeded, D.P.D. They represent the only real big news in the world of finance since many years. Through the processing of all trade on the underlying asset and options, a complex set of algorithms on the server [[http://www.playoptions.it|PlayOptions.it]] identifies the positions and premiums received, splits the synthetic position from the actual. beeTrader® shows you a histogram that do not require any interpretation. The computation needs historical data of the underlying. They will be requested by beeTrader® to the user's platform. The data will be sent to [[http://www.playoptions.it|PlayOptions.it]] server to process them. | + | The Open Interest are outdated, the D.P.D. are the only real big innovation in the finance world since same lusters. The algo splits the real position from the synthetic position and displays the real exposition at the market. In this way the trader konws where, when and the size contracts, in other words he cans realize the real strenght of the resistance/support levels.\\ |
| + | This processing needs of the underlying historical data which will then be required to connected broker. | ||
| - | Selection Strike step: The strike step used is always the first monthly expire, can be useful to the user to increase the Strike step on which are calculated DPD, in this way it brings together the Strike that has become intermediate and consequently we have a wider vision. | + | |**In order for the D.P.D. working properly it is necessary that the financial instrument under analysis has encoded [[http://manuals.playoptions.it/beeTrader/doku.php?id=symbol_manager|Symbol Manager]] the Option Chain. Financial instruments with Chain Options are written in blue for immediate identification. For the encoding process of the financial instruments in beeTrader® looks manual [[http://manuals.playoptions.it/beeTrader/doku.php?id=symbol_manager|Symbol Manager]] and specific instruction for each broker.**| |
| - | + | ||
| - | | ** In order to work properly D.P.D. is necessary that the financial instrument under analysis is encoded [[http://manuals.playoptions.it/beeTrader/doku.php?id=symbol_manager|Symbol Manager]] Chain Options. Financial instruments with Chain Options are written in blue for immediate identification. For the encoding process of financial instruments beeTrader® please refer to the manual of [[http://manuals.playoptions.it/beeTrader/doku.php?id=symbol_manager|Symbol Manager]] and the specific instructions for each broker. ** | | + | |
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| - | ==== Introduction: Open Interest VS D.P.D. ==== | + | ====Premise: Open Interest VS D.P.D.==== |
| - | For this explanation we will use the free software [[http://www.playoptions.it/software-per-il-trading-in-opzioni-fiuto-beta/|Fiuto Beta]]. \\ | + | For this explanation it will use the free software [[http://www.playoptions.it/software-per-il-trading-in-opzioni-fiuto-beta/|Fiuto Beta]].\\ |
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| - | The market takes position through derivatives Option contracts whose number of open contracts, is know by the clearing house which must ensure the counterpart of each contract. \\ | + | The market expectations can be inferred from Option contract, the number of open contracts, is required by Clearing House which must ensure buyer and seller of each contract.\\ |
| \\ | \\ | ||
| - | So for every Call or Put contract, there is a seller and there is buyer \\ | + | Then, simply, considering the number of contracts we have a first idea of expectation, of "market movers". You will see that if there is more or less interest on Call or Put contracts. \\ |
| - | This suggests, evaluating the number of open contracts, the position of "strong hands." \\ | + | |
| {{ :open_interest_01.png?nolink&600 |}} | {{ :open_interest_01.png?nolink&600 |}} | ||
| - | ??????? andrea queste 3 righe pensaci te che non idea di come costruire la sintassi in inglese????We have in green the number of put position and in Blu the number of Call position. It is now to interpret because the market has put on those strike and with those contracts. to do this I have to immerse myself in the strategist who actually took those positions and do the first considerations ... It 's true that each bar represents the number of open contracts and it is true that each bar is representative of those who bought and who sold . Buyers and sellers are in equal numbers and then if we do not do an additional reasoning to know how many contracts we have gives us no indication. What will the buyer if his contract is not in the direction you expected? Nothing! He will not do anything because they have no obligation, remember that it is the buyer, has already been spent and will just wait and see. The seller on the other hand will act on the market in two ways, can enter the underlying to repel the trend that would go ITM his option, or you will cover, in practice put in stock what the sales contract will oblige him to deliver. Again it intervenes on the market of sottostane and will modify the courses. \\ | + | Now you have a clear graphic representation, in green the number and position of the Put, in Blu the number and position of the Call. It's true that each bar represents the number of open contracts and is true that each bar is representative of those who bought and who sold. Buyers and sellers are in equal numbers and then if we do not do an additional thinking, to know the contracts number, gives us no indication. What will the buyer if his contract is not in the direction you expected? Nothing! He will not do anything because he has no obligation, remember that he is the buyer, has already spent and will just wait and see. However the seller will trade on the market in two ways, can enter the underlying for rejecting the trend that would go ITM its Option, or it will cover, in practice it will stock what the contract sold will oblige him to deliver. Even in this case acts on the underlying and will modify the market trend.\\ |
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| - | ?????So, contrary that you read in the literature, the number of option contracts are to be seen as contracts sold, or if the number of call is higher than the put means that the market expects a descent. Why the error of interpretation that reads the texts is easily explained: the texts are written a few years ago and was never corrected, years when, still had not permitted the sale of the options, but only the purchase. \\ | + | So, contrary to what you read in the literature, the number of option contracts are to be seen as selling contracts, so if the number of Cell is higher than that of the Put it means that the market expects a descent. Because of the error of interpretation that reads in the texts it is easily explained: texts are written some years ago and still had not permitted the sale of the options, but only the purchase.\\ |
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| - | ??????At this point we can count on the number of contracts, on the type and on strike on which they are placed. Here we have the supports and resistances that are the real media and the real market resistance. The buyer never to intervene in the market option contract diverting the trend, while the seller must, depending on whether Call or Put, take action on the underlying to be able to cover. That's why you have to consider the open interest, so it is called the number of open contracts, as part sold. At each level of open interest, there will therefore be a defense of the strike price sold more or less intense depending on the strength that the seller has and that comes from the premium received. Another aspect that you must know is if the contract that you see is "real" or is synthetic. I take the example with a Call: | + | Now we can rely on the number of contracts, on the type and on strike. Here we have the supports and resistances that are the real supports and the real market resistance. The buyer of option contract never intervenes in the market diverting the trend, while the seller must, depending on whether Call or Put, take action on the underlying in order to cover. That's why you have to consider the open interest, so it is called the number of open contracts, as part sold. At each level of open interest there will be a defense of the strike sold more or less intense depending on the strength that the seller has and that derives from amout. Another aspect that you must know is whether the contract is "true" or is synthetic. Example with a Call option: |
| - | * Sell 1 Call so the open interest increases by 1. Who reads it will think bear market. | + | * Sell 1 Call, as the Open Interest increases of 1. The reader will think the bear market. |
| {{ :open_interest_02.png?nolink&800 |}} | {{ :open_interest_02.png?nolink&800 |}} | ||
| - | * Sell 1 Call and at the same time I buy one future and so my position becomes a synthetical Put. | + | * Sell 1 Call e Buy 1 future, now the real position in a synthetic Put. |
| {{ :open_interest_03.png?nolink&800 |}} | {{ :open_interest_03.png?nolink&800 |}} | ||
| - | ** Basically what I want to show with these lines is that the reading of the Open Interest as it is explained in the common literature is useless. ** | + | **In practice what I want to show with these lines is that the reading of the Open Interest as is explained in the common literature NOT useless.** |
| - | // I Remember to offer the ability to not lose valuable information that can be obtained from the knowledge of institutional positions, [[http://www.playoptions.it/software-per-il-trading-in-opzioni-fiuto- beta / | Fiuto beta]] has two instruments, CIT and LIT used to analyzing daily movements. \\ | + | //I remember to offer the possibility of not losing the precious information that you can get from knowledge of the institutional positions, [[http://www.playoptions.it/software-per-il-trading-in-opzioni-fiuto-beta/|Fiuto Beta]] has two instruments, the CIT and the LIT used for analyzing the daily movements.\\ |
| - | The characteristic of these instruments is that, by analyzing non-real-time data, they offer a delayed response and they require the recording of daily positions, thus more suitable for operators not professionisti.// | + | CIT e LIT uses a delayed data, not realtime data, and require the recording of daily positions, so more suitable for non-professional operators.// |
| \\ | \\ | ||
| - | We the need a real-time instrument with an unambiguous answer. | + | Then we need for an instrument in real time and with a single answer, no interpretative. |
| - | The solution came with Ibeberg that allows real-time data, accessing of PlayOptions server,you obtain the indispensable divisions between real and synthetic positions. \\ | + | The solution is Iceberg that allows using real-time data and, accessing of PlayOptions server, get the subdivisions between real and synthetic positions.\\ |
| - | The Defense Points Distribution points,is the map of the defensive positions which will be the support and resistance in the path of the underlying trend. \\ | + | Thus was born the first histogram the world that considers all these factors: the Defense points Distribution, that the map of the defensive positions that will be the support and resistance in the underlying trend.\\ |
| - | In each trade of the futures we mark out all trade in option chain and with our algorithms we can identify positions premium received both. We group the output and we represent it as a histogram that, at this point, should not be interpreted, but only read. \\ | + | |
| {{ :open_interest_04.png?nolink&800 |}} | {{ :open_interest_04.png?nolink&800 |}} | ||
| - | As you see in the picture the DPD is completely different from the open interest\\ | + | How to see the image of the DPD is completely different to that of Open Interest, just to show that the system was passed several years ago and who continues to follow it or explain it is making a big mistake: forget the seller!\\ |
| - | \\let's make an analysis on Bank Of America reading DPD: \\ | + | |
| \\ | \\ | ||
| - | Uptrend detected by the numerous orange columns (Put) but with a strong resistance to the first level of Call (gray column on 14:08). The resistance that they will offer will be strong cause to the relative strength which is at higher level than the Put sellers. \\ | + | Let's take an analysis on the Bank Of America by the DPD:\\ |
| - | There are no doubts, today we have to built a bull strategy.The price can move between 12.89 and 08.14. \\ | + | |
| - | Note that the D.P.D. no longer coincide with the exact strike as Open Interest but incorporate the premium. | + | Trend up that is detected by numerous Orange columns (Put), but with a strong resistance to the first level of Call (colonna grigia a 14.08). The resistance that offer will be strong because the relative strength, the money they have to spend, it is at a higher level than the Put sellers.\\ |
| + | There are no doubts and interpretations, Today the strategy that needs to be done on this stock is bullish and strike engaged in the strategy must consider the price movement from 12.89 to 14.08.\\ | ||
| + | Note that the D.P.D. no coincide with the exact strike as Open Interest but incorporate the amount that moves the moment of intervention in defense. The 14 strike will defense at 14.08, because the amount of options sale is 14,08 - 14,00 = 0.08. | ||
| ---- | ---- | ||
| - | ==== Example==== | + | ====Example==== |
| - | Three horizontal lines are shown for an easy interpretation. They represent the relative strength \\ | + | The D.P.D. system is based on Relative Strength, then on the relative strength that opposes the overrun of the price level indicated by the financial instrument. Three horizontal lines are shown for ease of interpretation that represent the strength levels. \\ |
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| - | In the example below we can see a resistance at 23633.63 and a support at 23109.61, a stronger one at 22593.11 and 22851.36. | + | In the example below you can see how there is a resistance to the ascent to 23633.63, while descent is present a support to 23109.61, a stronger one to 22851.36 and subsequently to 22593.11. |
| {{ :dpd.png?nolink&1200 |}} | {{ :dpd.png?nolink&1200 |}} | ||
| - | The "Refresh" button update the D.P.D. with new data, you can do a Refresh every hour. Clicking on button "Refresh", if it is not spent an hour since the last update a window which initiates the time remaining appears. | + | "Refresh" button allows to update D.P.D. with new data, you can do a refresh every hour. Clicking on the "Refresh" button, if not already one hour after the last update, a window appears that notifies of the time remaining. |
| {{ :dpd_refresh.png?nolink&400 |}} | {{ :dpd_refresh.png?nolink&400 |}} | ||
| - | The Defense Point Distribution and [[en:charts#dpd_forecast_map_-_deepening|DPD Forecast Map]] are not comparable in fact the DPD is a photo in real time while the forecast is a projection based on previous movements.\\ | + | ---- |
| + | |||
| + | ====Strike Step Settings==== | ||
| + | |||
| + | Set to be used only for indexes, used to view the operations of large movers incorporating those of small traders who also work on intermediate strike on a weekly expires that are not used by institutional.\\ | ||
| + | **In the setting of the strike step should not exceed more than the interval between strike found the first monthly.** | ||
| + | |||
| + | Example: FTSE MIB weekly strike step = 100, first monthly strike step = 250, annual expire strike step = 500. Step to use = 250 | ||
| ---- | ---- | ||
| - | ====Legend ==== | + | ====Entries Legend==== |
| - | * Total Strength: sum of its forces divided into put and call | + | * Total Strength: sum of strength subdivided into Call and Put |
| - | * Avg. Strength: Average relative strength divided into put and call | + | * Avg. Strength: average relative strength subdivided into Call and Put |
| - | * Number of Levels: number of put and call levels with a relative strength greater than Low Strength | + | * Num Levels: number of put and call levels with a relative strength exceeding Low Strength |
| - | * 1st Low: first level from the price of the financial instrument with a greater relative strength of Low Strength | + | * 1st Low: first level from security price with a relative strength exceeding Low Strength |
| - | * 1st Norm: the first level from the price of the financial instrument with a greater relative strength of Normal Strength | + | * 1st Norm: first level from security price with a relative strength exceeding Normal Strength |
| - | * 1st High: the first level from the price of the financial instrument with a greater relative strength of High Strength | + | * 1st High: first level from security price with a relative strength exceeding High Strength |
| - | * 1st Low%: distance% compared to the price of the financial instrument of the 1st Low | + | * 1st Low %: distance % compared to the price of security and the 1st Low |
| - | * 1st Norm%: distance% compared to the price of the financial instrument of the 1st Norm | + | * 1st Norm %: distance % compared to the price of security and the 1st Norm |
| - | * 1st High%: distance% compared to the price of the financial instrument of the 1st High | + | * 1st High %: distance % compared to the price of security and the 1st High |
| - | * Highest Level: relative maximum value of the force divided into put and call | + | * Highest Level: maximum relative strength subdivided into Call and Put |
| - | * 23633.63 level: the First Call resistance price (relative to the example) | + | * 23633.63 level: first resistance Call (only for the example) |
| - | * 23891.88 level: the price of the second resistance Call (relative to the example) | + | * 23891.88 level: second resistance Call (only for the example) |
| - | * 24150.13 level: the price of the third Call resistance (relative to the example) | + | * 24150.13 level: third resistance Call (only for the example) |
| * ... | * ... | ||
| - | * X level ...: the number of Call resistences and their value are closely related to the financial instrument and market conditions | + | * x level ...: number of call resistance and the value are related to the security and market conditions |
| - | * 23109.61 level: Price of the first Put support (relative to the example) | + | * 23109.61 level: first support Put (only for the example) |
| - | * 22851.36 level: Price of the second Put support (relative to the example) | + | * 22851.36 level: second support Put (only for the example) |
| - | * 22593.11 level: Price of the third Put support (relative to the example) | + | * 22593.11 level: third support Put (only for the example) |
| * ... | * ... | ||
| - | * X level ...: the number of Put resistences and their value are closely related to the financial instrument and market conditions | + | * x level ...: number of put resistance and the value are related to the security and market conditions |
| ---- | ---- | ||
en/d.p.d.1472552365.txt.gz · Ultima modifica: 2016/08/30 12:19 da playoptions
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Ad eccezione da dove è diversamente indicato, il contenuto di questo wiki è soggetto alla seguente licenza: CC Attribution-Share Alike 3.0 Unported
