Understanding The Option Chain

Understanding The Option Chain

Ninad Ramdasi
/ Categories: Others, Expert Speak, DSIJ_Magazine_Web, Expert Opinion, DSIJMagazine_App, Regular Columns, Expert Speak

Option chain is a very popular tool for data analysis among derivatives traders. It is available on the NSE website and there are other software too offering this feature, writes Prashant Shah, Co-founder & CEO Definedge Securities 

Option chain is a very popular tool for data analysis among derivatives traders. It is available on the NSE website and there are other software too offering this feature, writes Prashant Shah, Co-founder & CEO Definedge Securities 
 

Option chain is basically a data table. When you select the symbol and expiry of any instrument, you get the data of all the strike prices of that instrument. The option chain captures information such as the premium, open interest, volume and implied volatility of each strike price of that instrument. It is presented in a very structured way, and it can help assess the strength of the trend and the important support or resistance level of the instrument. Let’s understand how to read it. 

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