Option Price SR (csgnanam)

## ⚖️ Disclaimer

This script is provided for **educational and analytical purposes only**.
It does not constitute financial advice.
Use proper risk management and trade responsibly.
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## 📌 Indicator Concept & Trading Logic

This is a rule-based reference indicator designed to interpret **option price behavior** using **previous-day derived equilibrium levels**.
The indicator helps traders classify the market into **range-bound, breakout, or invalid trade zones** by observing how **ATM Call (CE) and Put (PE)** prices react around these levels.

All levels are **fixed for the trading day** and recalculated only on the next session.

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## 📊 Core Levels Explained

The indicator plots the following **daily-anchored reference levels**:

* **PDH / PDL** – Previous Day High / Low of the option
* **PDC** – Previous Day Close
* **100% AVG (Breakout Zone)**
Average of previous-day CE and PE prices for the same strike
* **75% AVG (Midzone)**
Balance / decision zone
* **50% AVG (Support Zone)**
Lower acceptance / decay boundary

These levels act as **reaction zones**, not prediction lines.

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## 🧠 Market Interpretation Logic

### 1️⃣ Range-Bound Market Condition

* When **both ATM CE and ATM PE** are **trading within the 100% AVG (Breakout) level**,
the market has a **high probability of remaining range-bound**.
* Premium expansion is limited on both sides.
* Ideal environment for **non-directional strategies**.

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### 2️⃣ Breakout Validation

* A **true directional move** requires **asymmetry** between CE and PE.
* If **one side moves into breakout**, the **opposite side must stay suppressed**.

**Example:**

* If **CE breaks down below Midzone**,
then **PE must be above Breakout or at least above Midzone**.
* The same logic applies inversely for PE breakdowns.

This confirms **capital rotation**, not random premium decay.

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### 3️⃣ Midzone (75%) – Reversal Watch Area

* The **Midzone** is a **high-probability reaction area**.
* Many intraday reversals initiate from this level.
* Price acceptance or rejection here defines:

* Continuation
* Mean reversion
* Failed breakout

This zone should be **closely monitored for structure and volume behavior**.

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### 4️⃣ Support Zone (50%) – Trade Invalidation

* When an option price trades **below the Support (50%) level**:

* That option side becomes **non-tradable**
* Premium strength is lost
* Risk increases significantly

Trades **below support** are considered **low probability** and should be avoided.

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## ⚠️ Important Usage Notes

* This indicator is **not a buy/sell signal generator**
* It is a **context and decision-filter tool**
* Best used in combination with:

* Price action
* Structure
* Spot/index behavior
* Time-of-day context

All levels are **session-anchored** and do **not repaint intraday**.

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## 🎯 Intended Use Case

* Intraday option traders
* ATM / near-ATM focus
* Range vs directional market identification
* Premium behavior analysis
* Trade filtering and risk control

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