Options Open Interest [OI] Change in ThinkOrSwim [TOS] Free Script
In the world of options trading, it’s important to keep an eye on Open Interest (OI) change. OI measures the total number of open contracts for a specific security and is used as one indicator in making buy or sell decisions.
A positive change in OI signified increased interest from traders, while negative changes indicate that there may be waning interest.
In this blog post, we’ll discuss how you can interpret Options Open Interest [OI] Change when using ThinkOrSwim — a powerful online platform for analyzing stocks and options trades.
First off, we need to understand what OI really means and why it’s so valuable. An option contract refers to a financial agreement between two parties where they exchange the right (but not obligation) to either buy or sell shares at pre-determined prices within a certain timeframe.
Keeping track of contract values allows investors and traders to easily gauge market sentiment without actually placing orders with their brokerages; if more people are buying up these rights, then demand is high — but if fewer people are interested in them? Well then… maybe demand has waned due Low Volume Trading Strategies being utilized by large institutional players / hedge funds etc..
When evaluating changes in Option Open Interest Levels with ThinkorSwim users have several quick wins: Open the “Options Time & Sales and see what is been bought and sold. The top two under “Today’s biggest” shows the biggest trades on the calls and puts OI chain. You can expand it to show the 4, 6 or 8 biggest trades.
The other route is to use this script. Go to SETUP > OPEN SHARED ITEM > PUT THE LINK IN THE “SHARED ITEM URL” and SAVE IT accordingly. Afterwards, click on the “LAYOUT” tab on the Option Chain, add the loaded script and look at the option chain. It has been color coded for easy reading.
Raw Script:
“plot OI_NetChg = open_interest() — open_interest()[1]; OI_NetChg.SetDefaultColor(color.black); AssignBackgroundColor(if OI_NetChg > 10000 then color.UPTICK else if OI_NetChg > 5000 then color.Green else if OI_NetChg >= 2500 then color.LIGHT_GREEN else if OI_NetChg > 0 then color.YELLOW else if OI_NetChg < -10000 then Color.DOWNTICK else if OI_NetChg < -5000 then color.LIGHT_RED else if OI_NetChg <= -2500 then color.ORANGE else if OI_NetChg < 0 then color.LIGHT_ORANGE else Color.Current );”
If OI_NetChg > 10000 then color.UPTICK
If OI_NetChg > 5000 then color.Green
If OI_NetChg >= 2500 then color.LIGHT_GREEN
If OI_NetChg > 0 then color.YELLOW
If OI_NetChg < -10000 then Color.DOWNTICK
If OI_NetChg < -5000 then color.LIGHT_RED
If OI_NetChg <= -2500 then color.ORANGE
If OI_NetChg < 0 then color.LIGHT_ORANGE
Look at the OI Change for $WWE [ $105 Strike Price for January 19, 2024]
Over 10,000 new contracts. Old OI was 4.
Script : tos.mx/r97hCod
Ultimately tracking Options Open Interest Levels thinkorswim gives users competitive edge usually reserved floor traders institutions Accurately identify upstream predators holding paper make informed management related decision increasing chance drive forward trends desired trade results.
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