Table of Contents
How do you interpret option chain data?
Understanding an Option Chain
- OI: OI is an abbreviation for Open Interest.
- Chng in OI: It tells you about the change in the Open Interest within the expiration period.
- Volume: It is another indicator of traders interest in a particular strike price of an Option.
- IV: IV is an abbreviation for Implied Volatility.
How do you study options chain analysis?
How to identify support and resistance level or zone?
- STEP 1 find the highest OI column on both sides (call and put side)
- STEP 2 note the corresponding change in OI.
- SUPPORT (PE) biggest open interest number + positive change in open interest.
- RESISTANCE(CE) biggest open interest number + positive change in open interest.
How do you choose an option chain?
How to Read a Stock Option Chain…
- Expiration Months. As you can see from the picture there are several different expiration months listed horizontally across the top of the option chain (Aug 09, Sep 09, Dec 09, etc.).
- Calls Options and Put Options.
- Symbol.
- Last.
- Bid.
- Ask.
- Open Interest (Open Int)
- Direction.
What is volume in option chain?
Volume refers to the total number of contracts that are created over the course of the day. For instance, a volume of 100 represents 100 contracts have been traded on a particular option during the day. Keep in mind that in the options segment, for every buyer, there is a seller.
What is considered high volume in options?
High option volume is when there is abnormal volume that far exceeds the volume for similar strike options. Typically it can be 200\% or higher volume.
How do you identify call writing and put writing in option chain?
Any option Chain be it for stock or Index is always read from Sellers point of view. So whatever number of OI or change in OI you see you can take it as those number of contracts(PUT or CALL)written by Sellers. Look at the NSE index option chain by 3.20 pm.
What is option chain data in options trading?
Option chain data is the complete picture pertaining to option strikes of a particular stock or index in a single frame. In the Option chain frame, the strike price is at the centre and all data pertaining to calls and puts on the same strike are presented next to each other.
What is the option chain in NSE?
The option chain not only captures the price and volume data but also more analytical parameters like the shifts in open interest (OI), shifts in implied volatility (IV) etc. Before understanding how to read the option chain data in NSE, let us first look at the key components of the option chain.
What is the Order of the columns in an option chain?
The order of columns in an option chain is: strike, symbol, last, change, bid, ask, volume and open interest. The strike price is the price at which you can buy (with a call) or sell (with a put). Call options with higher strike prices are almost always less expensive than lower ones.
How to interpret this index options chain?
Here is how to interpret this index options chain. It gives you a quick and rapid picture of in-the-money and out-of-the money options. While the strikes shaded in yellow are the ITM options, the un-shaded strikes are the OTM options. This rule applies to calls and to puts.