Options Expirations in the DIA and support/resistance

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There are a few ideas which will help you decipher where support and resistance are in the market. With the help of TradingView's powerful graphical ability and a subscription to some of the premium services, you can "see" levels of support/resistance in unique ways.

One I am showing you here is "volume profile" which you can set over a time range that you specify. I like to see volume in this way because I want to see volume in the current trend and this provides that for me. When I see a place where very little volume has traded I KNOW that level is important because one side of the market was so strong at that level that it didn't even trade much there. If you rally back up to a level where little volume traded, like the red box marked "LOW VOLUME RESISTANCE", then you can very safely expect a reaction, at least. Some may just call that level a "gap" or a "breakaway level" but I label it "Low Volume Resistance".

I also have plotted the options expirations on this chart, which can often be useful to know about because it is my belief that expirations are the summation of all of the speculators and hedgers "thinking" for that expiration cycle. Everyone closes out their positions or rolls them into the next expiration, but the act of rolling those position and closing positions exerts a force on the market that is useful to reference in future days of trading. Knowing that price gives you information and has you armed and prepared. To NOT know it is to ignore what is going on in the market.

So, I look forward to your comments and questions. And sorry if this looks like an advertisement for TradingView's premium services, but they are valuable and worth it.

Best regards,


9:47AM EST 9/28/2015
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Market Wizards is one of my favor books ... among others. But gong back to the COT Report and the CBOE page ( or any other page with options information ), any coments on that end ... and I promise I´ll write no more !!! ... jaaaaaa
Hello @ARTTV, the CBOE.com website has a lot of information on the current volumes and open interest of different options. You can look for the most open interest and figure that they will be the most important since they have the most hedges on at that price. If puts are open below the market, that means support since the put creation put selling pressure on the market (almost always). If there are calls open above the market's last sale, then that is resistance since speculative players are already long from that level and shorts are hedged at that level. Over time, you will see how options work. It is pretty simple. Options open interest is usually a fraction of one-day's trading volume, but if it is is more then it will be even more important.
Tim; I have been "learning" to trade for the las 4 years and I guess I´ll learn all my life, which is good. Now, Options and COT Report is something I would love to understand better, at least the "key" info they provide to trade Stocks, Futures and Forex. Any advice for a "life-long student" ??? ... thank you !!!
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Dive into everything that interests you and you will learn extremely fast. You will only really learn what is very interesting. Read "Market Wizards" and see that there are many ways to trade, it just comes down to money management of your trades.
Thanks Tim, nice chart. Stock markets are moving today as we predicted.
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Thank you Tim, and I agree with you when you say that "teching is the best way of learning" ... by the way do yoy follow the CBOE web page for Volume, Open Interest and Close dates ??? or do you have another link ??? ... thanks again ...a LOT !!!
Tim as always great work and inside. Quick question: you check the price of weekly options or monthly options ??? what web do you use to follow the option dates closes ??? Thank you very much, it is a privelige to "follow you" !!! all the best ... Arturo
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I only graph the monthly options expiration. Each market will have its own personality as far as knowing which options expiration cycle has the most volume. Tracking where the market is when the most options positions are closed out is KEY to defining important "hidden levels" in the market
And thanks for your question and nice comments. It is my pleasure to help. I help myself when I help everyone here at TradingView.
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