Learn · Options
How to read an option chain
An option chain is a table of every option on one index or stock, for one expiry. It looks dense. It answers four questions: what is open, where, at what price, and what changed today.
The layout
Strikes run down the middle. Calls sit on one side and puts on the other. A call gains when the price rises above its strike; a put gains when it falls below.
For each strike and side the chain shows the premium (the option's price), the open interest (contracts open), the change in open interest today, the volume traded, and often the implied volatility.
Strikes near the current index level are called at the money. Calls above it and puts below it are out of the money: they hold only time value, and most open interest sits there.
Open interest and its change
Open interest rises when a new buyer and a new seller create a contract, and falls when one is closed. It is the best single measure of where positions are concentrated.
The change tells you what was done today. Reading it with the premium gives four cases, taken from the seller's side:
- Open interest up, premium down: fresh selling that is being paid. The level is being defended.
- Open interest up, premium up: selling into a rising premium. The level is being tested.
- Open interest down, premium up: sellers buying back at a loss. The level is giving way.
- Open interest down, premium down: sellers closing in profit.
Support, resistance and the range
The strike above the index with the most call open interest is the level sellers have bet most heavily it will stay under. The strike below with the most put open interest is the level they have bet it will stay over. Together they mark the sellers' range for that expiry.
Not every pile counts. Open interest far from the current level is mostly tail cover and lottery tickets, not a line being defended. Schema counts only strikes within reach of the expiry.
What prices imply
Premiums carry information that open interest does not. The price of a call spread across a level, divided by the spread's width, is roughly the chance the market gives to finishing above that level.
These are market-implied odds: what prices say, not a forecast. They can be checked against what later happened, which is how you learn whether to trust them.
End of day and live
During market hours, NSE's own option chain and brokers' terminals show live figures. After the close, NSE publishes the full day's contracts in its F&O bhavcopy.
Nifty PCR and max pain today is built from that end-of-day file.
Questions people ask
What is OI in option chain?
OI is open interest: the number of option contracts open at a strike. It rises when new contracts are created and falls when they are closed.
How do I find support and resistance from an option chain?
Read it from the seller's side: the strike with the most call open interest above the index is resistance, and the strike with the most put open interest below it is support.
What does change in OI tell you?
Whether positions were added or closed at a strike today. Read together with the change in premium, it shows whether sellers were adding, being tested, or backing away.
What is IV in the option chain?
Implied volatility: the volatility that makes a pricing model match the option's market price. Higher IV means the option is more expensive.
Keep reading
Research and information, not investment advice. Historical patterns describe the past and do not promise returns.