How to analyse option chain data live Interpretations?
Consider the option chain of Nifty 50 of (28/09/2023) expiry. On the right side options chain it has all Put related data and on the left side it has all call related data. There is a line highlighted in blue which plots the current spot price and the option nearest to it is considered as At-The-Money (ATM) option. Also in order to recognise In-The-Money (ITM) option yellow color shade is given for all the strike belongs to ITM option for Call side and Put side both.
The Put strike with highest Put Open Interest is considered as Strong Support, as more no of traders has shorted that option so it act as a strong support level for the market. Call strike with highest open interest is considered as a Strong Resistance that means If market breaks these levels means highest loss for big institutions so they don’t let it happen. If the same happens and we see unwinding in the strike price which we can see from the change in open interest that means that the big players are squaring off the position and there is high probability that the particular index/stocks moving in that direction for next few trading session.
This data helps to gauge the near term support and resistance of particular index/stock. With the help of the open interest bar line provided against all the strike, this will help to easily identify which strike for call and put is highest in open interest.
By using the Options Chain Data and Interpretations feature you can now easily interpret the option chain analysis of the current expiry at the live market. You can easily track the movement of options using the options chain. You can select the contract in the contract search and the corresponding expiry date to see the stock/index of that particular expiry.
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