How it works?

CoC is often used by traders to gauge market sentiment. Analysts see a significant drop inCoC as a sign of upcoming falls in the underlying. The CoC of Nifty futures' benchmark index fell by almost half a week ago and served as an indicator that the index was correcting. Conversely, a rising CoC means that traders will be willing to take on higher risks in order to hold the position. This is why analysts expect a rise in underlying. CoC can be expressed in percentage as an annualized number.