Reversal Values
Reversal values are the pre calculated levels from where market is most likely to reverse, In AOC these values are calculated for each strike price based on several factors such as IV, Delta OI, LTP etc. Reversal values are also referred as Elastic Ends EOS, EOR etc. We use these values to marke levels on the chart and take trade accordingly.
Types of Reversal Values
In AOC we provide three types of reversal values which are 1. SPOT reversal values 2. Future Reversal Values and 3. Weekly (Synthetic) future reversal values. All these reversal values also has two sub types a. Average (9:30 AM ) Reversal Values and b. Current Reversal Values. We will learn more about these in details in this article.
1. SPOT Reversal Values
Spot reversal values are calculated based on several data from option chain such as LTP of CE and PE, Spot price, OI data and greeks. This is applicable on spot price only which means we can plot these levels on spot price only but not the future chart.
2. Future Reversal Values
Future reversal values are calculated based on several data from option chain such as LTP of CE and PE, FUTURE price, OI data and greeks. This is applicable on future chart only which means we can plot these levels on future chart but not the spot chart.
3. Weekly/Synthetic Future Reversal Values
Weekly or the synthetic reversal values are calculated primarily based on LTPs of CALLS and PUTS. In this calculation primary focus is on LTP but not the greeks or OI data. Thus this reversal values are almost similar every day. In most cases you will find the weekly reversal prices between 22-28 and 71-77 range. This is applicable on spot price only which means we can plot these levels on spot price only but not the future chart.
- Click of strike price.
- This will open a windows which shows reversal prices.
- You can click on SPOT , FUTURE and WEEKLY FUTURE to switch between tabs.
- You can click on the copy icon to copy the values which you can paste in trading view or ltp calculator using ctrl+v.
What are Average and Current Values
AOC provides two values for ease of taking trading decisions based upon your trading style.
The average elastic ends are values which are calculated based on the reversal values from 9:28AM to 9:32AM and they are fixed. As we take trade only after 9:30AM these values are fixed and are available as constant through out the day,
The current elastic ends are values that are calculated at every 10 seconds based upon the current market data and greeks values. These values are always changing and updating. There are slight variation the values every time.
Which Values should we use ?
Choosing from SPOT, Future and Weekly Future
In most cases we use spot reversal values, but this does not mean others are not useful and we should not use them. Future elastic ends should be used on Future chart, if you trade based on future chart you should only use the future reversal values. Weekly future elastic ends should be used on spot chart and according to our observations this work best on Friday and Monday for NIFTY because there are continuous writing being done. In short weekly future levels works best where there is less liquidity ie volume is low.
In general you can draw both weekly and spot levels on spot price, then observe whether market is respecting spot values or the weekly values and the trade according to the observations.
Choosing from Average and Current Values
For most cases you should use the average values. There are some exceptions where we should use the current values which are
- Before 9:30AM, there you do not have average values.
- After 2-2:30 you should use the current elastic ends.
- If there is vast difference between average and current values (at least 20+ points for nifty) you should use current values that also if the current value is repeating and is not varying too much.
- If for some reason the average values are 0 or incorrect.
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