F&O Heatmap

A heatmap uses colours to represent data visually. The F&O heatmap is typically represented as a grid, with each cell representing the derivatives of a stock. The colours indicate changes in the derivative instrument’s price, open interest (OI) or volume. Shades of green indicate positive changes, while shades of red indicate negative movements. The intensity of the colour corresponds to the magnitude of change.

To read an F&O heatmap, you need to look at the colour scheme to understand what each colour and share represents. Greens generally indicate increases while reds may signal decreases. You can also check the intensity of the colours to gauge the magnitude of change and look for clusters of similar colours to spot trends. On the Motilal Oswal Research 360 platform, you can hover over each cell to view more details about each contract, like the price, price change, OI, OI change, volume, volume change and OHLC price points.

A heatmap shows how the key metrics of a stock or security have changed at a glance. For instance, the F&O trading heatmap on the Research 360 platform makes it easy to visualise the price movements, changes in open interest and shifts in volume. This helps you gauge market sentiment and spot potential trading opportunities as you can understand which derivatives are attracting more interest, where the big money is moving and where the price is highly volatile.

Heatmaps can make trading easier as they offer a quick visual overview of market data. This helps you spot trends and patterns rapidly. For instance, in the F&O heatmap on the Research 360 platform, you can identify the derivatives that are highly bullish or bearish based on the colour of the cell. You can also look at the percentage of OI change to assess liquidity at a glance.

The data in the heatmap is calculated by comparing current values to previous values. The difference is then represented as a percentage and in terms of absolute values. For the price data, it is the change from the previous closing price. Variations in open interest data are calculated by comparing the current OI to the previous day’s OI. Volume changes are also similarly determined. The cells are then assigned colours based on the direction and the magnitude of the change.

You can use a heatmap to get a quick overview of the market segment it represents. For instance, if you want to assess the F&O market at a glance, you can use the Research 360 F&O heatmap. It is particularly useful if you want to evaluate overnight changes in the market and adapt your trading strategy accordingly. You can also use it to gauge the market’s reaction after any significant market event.

A limit order heatmap is a specialised type of heatmap used in trading platforms. It visually represents the concentration of limit orders at different price levels in the market. Different colours may be used to represent the volume of orders at each price point. The map also shows where buy and sell orders are clustered. This, in turn, can make it easier to spot potential support and resistance levels.

To calculate risk using an F&O heatmap, you need to analyse patterns and changes in key metrics. Look for large changes in open interest (OI) or volume; they might indicate increased risk as the volatility is high. You can also evaluate the intensity of colour changes to assess the magnitude of market movements. It also helps to consider the overall pattern of the heatmap relative to current market trends and news.