Key Concepts:
- Cash Market: Involves the direct buying and selling of securities.
- Futures Market: Consists of contracts to buy or sell an asset at a future date and price.
- Options Market: Includes contracts that provide the right to buy or sell an asset at a specific price before a certain date.
- Weightage Assignment: Each segment (Cash, Futures, Options) is assigned a specific weightage, which can fluctuate based on market conditions.
- Dynamic Weightage: The weight assigned to each segment depends on its current influence and activity. For example, if futures trading is particularly active, it might be given more weight in the analysis.
- Turnover: The total volume of trades within each market segment.
- Activity of Big Players: The positions and trading actions of significant market participants.
Purpose of Analysis:
- To understand which market segments are currently driving market movements.
- To adjust trading strategies based on the relative importance and activity in each market segment.
By monitoring and analyzing these elements, traders and analysts can gain valuable insights into market trends and make more informed decisions.