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How to read an option chain in India
An option chain shows every available call and put contract for a stock or index, with columns for premium, open interest, volume and implied volatility. Reading it correctly reveals where traders are positioned and which strikes the market treats as battlegrounds.
In one line
To read an option chain, find the at-the-money strike nearest to the spot price, then scan the call open interest on the left and put open interest on the right to find the strikes with the heaviest positioning, because the highest call OI level acts as resistance and the highest put OI level acts as support for that expiry.
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The layout: calls on the left, puts on the right
The option chain reads like a tug-of-war scoreboard. Strike prices run down the centre column in ascending order. To the left are call options, to the right are puts. The row where the strike is closest to the current spot price is the at-the-money (ATM) row, often highlighted in a different colour by the platform. Strikes below the spot are in-the-money for calls and out-of-the-money for puts. Strikes above the spot are out-of-the-money for calls and in-the-money for puts.
For each strike on each side the chain shows the last traded price (LTP) or premium, the bid-ask spread, the open interest, the change in open interest since yesterday, the volume for the session, and on most platforms the implied volatility (IV). The premium is what you pay or receive for the option. Open interest is how many contracts are still open and not squared off. Change in OI shows whether new positions are being added at that strike or existing ones are being closed.
Finding support, resistance and positioning
Traders watch two key levels when scanning the chain. The strike with the highest put open interest is treated as a support zone, because put writers (who have sold puts) want the spot to stay above it. The strike with the highest call open interest is treated as a resistance zone, because call writers want the spot to stay below it. These are not guaranteed levels, but they represent where the most money has been staked by sellers.
Change in open interest through the day is where the real-time signal lives. A sudden build in call OI at a strike that was quiet in the morning tells you fresh writers are setting up there. A rapid decline in put OI near support tells you put writers are covering, which can mean their confidence in that support is weakening. Reading the chain is a daily practice, not a one-time lookup. The numbers shift as participants enter and exit.
The implied volatility column
Each strike also carries its own implied volatility reading. For a given expiry the IV tends to be a curve (called the volatility smile or skew) rather than a flat line. Out-of-the-money put strikes on indices often carry higher IV than ATM strikes, reflecting the extra demand for downside protection. A sudden spike in IV across the chain, especially on one side, signals that the market is pricing a bigger move than usual and option premiums are inflating.
When reading the chain before a major event like an RBI policy, a quarterly result, or a Budget, IV can be significantly elevated relative to normal levels. This elevated premium erodes fast once the event passes (a phenomenon called IV crush), which is why experienced traders are selective about buying options into high-IV events rather than writing them.
FAQ5 reader questions · AEO-eligible
Common questions on reading the option chain.
Where can I see the option chain for Nifty?
The NSE website (nseindia.com) publishes the live option chain for Nifty, Bank Nifty, and individual stocks. Most broker platforms like Zerodha Kite, Upstox and Angel also display the chain in a more visual format.
What does change in OI mean in an option chain?
Change in OI shows how many new contracts have been added (or closed) at a strike compared to the previous close. Rising OI means fresh positioning; falling OI means participants are exiting that strike.
How do I find support and resistance from the option chain?
The strike with the highest put open interest is treated as a support zone, because put writers are defending it. The strike with the highest call open interest acts as resistance. These levels shift as OI builds or unwinds, so check them fresh before each session.
What is IV in the option chain?
IV stands for implied volatility. It is the market's expectation of how much the underlying will move, derived from the option premium. High IV means options are expensive; low IV means they are cheap relative to recent norms.
What is the difference between OI and volume in the option chain?
Volume counts contracts traded in the current session and resets daily. OI counts contracts still open and is cumulative. Volume shows activity; OI shows commitment.
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ITM, OTM and ATM options
The three states of moneyness for any option, how to locate them on the chain, and why ITM options cost more.
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Implied volatility
The market's forward-looking fear gauge baked into option premiums, and how to use it to judge whether options are expensive or cheap.
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Open interest
The count of live contracts, and what rising or falling OI tells you when paired with price.
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What is PCR
The ratio of put to call open interest, what a high or low reading signals, and the contrarian twist.