What Is an Option Chain?
An option chain (also called option table) is a comprehensive display of all available call and put options for a specific underlying asset (such as Nifty 50, Bank Nifty, or a specific stock) across different strike prices and expiry dates. It shows the premium, open interest, volume, implied volatility, and Greeks for each option contract. Reading an option chain is a fundamental skill for any options trader in India.
Structure of an Option Chain
A typical option chain has calls on the left, puts on the right, and strike prices in the middle:
- Left side (Calls): LTP (Last Traded Price), OI (Open Interest), Volume, IV (Implied Volatility), Greeks for each call option.
- Centre: Strike prices listed from lowest to highest.
- Right side (Puts): Same data as calls but for put options at each strike.
The row at the current market price (highlighted in most displays) separates in-the-money from out-of-the-money options.
Key Columns in an Option Chain
| Column | Meaning |
|---|---|
| LTP | Last Traded Price (current premium) |
| OI | Open Interest (total outstanding contracts) |
| Volume | Number of contracts traded today |
| IV | Implied Volatility (expected price movement priced into the option) |
| Delta | Rate of change of option price per Rs 1 move in underlying |
How to Use Option Chain for Market View
- Max OI strike: The strike with the highest call OI is resistance; highest put OI is support. Markets often gravitate toward high OI areas on expiry.
- PCR (Put-Call Ratio): Total put OI / Total call OI. PCR above 1 is generally bullish (more puts written); PCR below 0.7 is bearish.
- IV skew: If put IV > call IV at same distance from ATM, market fears downside more than it expects upside.
Where to Access Option Chain in India
- NSE website (nseindia.com): Free, official option chain for all F&O instruments.
- Broker trading platforms: Most professional platforms show real-time options chains.
- Sensibull, Opstra, Option200: Third-party platforms with enhanced OI analysis features.
Key Takeaway
An option chain is the command centre for options traders, providing all the information needed to assess premium, market positioning, and volatility at every strike price. Learning to read an option chain is the first practical step toward becoming a competent options trader. Use the Lemonn app alongside NSE's option chain data to build your understanding of how options markets work in India.
